Meta Platforms (META +0.91%) kicked off the week with a bang. In a press release that dropped Monday morning, the social media and artificial intelligence (AI) specialist announced a massive five-year AI infrastructure agreement with neocloud provider Nebius Group (NBIS 0.26%). Under the terms of the deal, Nebius will provide Meta with $12 billion of dedicated processing capacity, leveraging the "first large-scale deployments of the Nvidia Vera Rubin platform." Nebius will begin delivering this capacity in early 2027.
The deal goes further. Over the next five years, Meta has agreed to purchase additional compute capacity from Nebius as it comes online, for an additional $15 billion, bringing the total value of the contract to $27 billion.
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Cloud computing has been around for decades, but the advent of the neocloud has only just begun. These specialty cloud operators stockpile state-of-the-art chips and provide AI processing services, commonly called GPU-as-a-Service (GPUaaS).
Nebius has been growing like wildfire in recent months and shows no signs of slowing. The stock had a market cap of just over $28 billion when the market closed on Friday, but news of the deal with Meta has driven its shares up as much as 17% (as of this writing), pushing its market cap above $32 billion.
Just last week, Nvidia announced a $2 billion investment in Nebius as part of a strategic partnership aimed at building "multiple gigawatt-scale AI factories in the U.S." and deploying as much as 5 gigawatts of AI capacity by the end of the decade.
NASDAQ: NBIS
Key Data Points
Nebius has experienced blistering growth driven by robust demand for its neocloud services, but has yet to produce consistent profitability. In 2025, revenue of $530 million surged 479% year over year, while its operating loss of $596 million worsened by 49%.
Traditional cloud services have struggled to keep up with surging demand for AI services, and the resulting data center build-out has been notable. The largest cloud operators -- Amazon Web Services, Alphabet's Google Cloud, Microsoft Azure, and Meta -- are planning to spend nearly $700 billion on capex in 2026 to meet the soaring demand for AI, as their existing data centers are capacity-constrained.
This shortfall represents a significant opportunity for neocloud operators like Nebius to fill the void. That said, at 57 times sales, stock is pricy, particularly for a company with such a large operating loss. Nebius remains a high-risk, high-reward opportunity, and any stake should be appropriately sized within a balanced portfolio.
