Key Takeaways
- Cerebras shares jumped on Nov. 13 after the AI chipmaker raised its 2026 outlook and said Microsoft had signed on as a customer.
- Each new source of AI computing power Microsoft adds makes it less likely to need Nebius for its next big deal.
- Nebius’s Microsoft contract is worth $17.4 billion to $19.4 billion. Nebius has more than $40 billion of investment-grade backlog, and it borrows against that backlog, so this one contract carries a lot of weight.
- The signed contract is safe for now, so watch whether Nebius delivers Microsoft’s remaining capacity by its new second-quarter 2027 date and who signs its next large deal.
Cerebras Systems (CBRS) jumped on Nov. 13 after it raised its full-year outlook and added Microsoft (MSFT) as a customer.
That’s a big win for Cerebras and a worry for Nebius Group (NBIS). Microsoft is behind one of the two largest contracts on Nebius’s books, and it keeps finding other places to buy computing power.
Microsoft keeps adding suppliers
Cerebras raised its 2026 core revenue outlook to $940 million to $960 million, up from $880 million to $890 million. It has now beaten its own guidance three quarters in a row. On its third-quarter call, Cerebras said Microsoft had signed a cloud deal with it, which makes Microsoft its third hyperscaler customer after Amazon Web Services and Oracle. Cerebras CEO Andrew Feldman told CNBC that Microsoft signed in October: “We believe revenue begins to show up in Q1 ‘27.”
Cerebras is also big enough now to matter. It booked $210.8 million of GAAP revenue in the September quarter and expects to triple its revenue in 2027.
The deal fits a pattern at Microsoft. Bloomberg reported on Nov. 5 that Microsoft is tightening oversight of projects from Nebius and other neoclouds, debating whether to sign new neocloud deals, and building more of its own data centers. A day later, Bloomberg reported that Microsoft is winding down a deal to rent AI computing from Oracle after declining to renew it. Microsoft also plans to begin production deployments of its own Maia 300 chip in 2027.
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The number that matters
Microsoft’s contract with Nebius runs through 2031 and is worth $17.4 billion to $19.4 billion. Nebius has more than $40 billion of contracted backlog with investment-grade customers. Even the low end of Microsoft’s contract is more than 40% of that $40 billion, and Meta’s deals make up much of the rest.
Analysts’ estimates rest on contracts like these. They expect Nebius’s revenue to climb from $530 million in 2025 to $24.0 billion in 2028:
On Nov. 12, Nebius guided to $12 billion to $13 billion of 2027 revenue, right around the Street’s $12.4 billion. The backlog is spread over several years, so getting to $24.0 billion in 2028 alone will most likely take big new deals, and hyperscalers sign the biggest ones. Every supplier Microsoft adds gives it another choice when that next contract comes up, and more room to push on price.
The backlog backs the debt too
Nebius also uses that backlog as collateral for asset-backed loans. That means a weaker outlook from its biggest customers would show up on the balance sheet, not just in revenue. Nebius has borrowed heavily: total debt went from $50 million at the end of 2024 to $10.1 billion at June 30, 2026, against $8.04 billion of cash and short-term investments:
In October, it added a $3.5 billion, 364-day facility from Citi. Loans like these are only as good as the contracts behind them, and Microsoft’s is one of the largest.
Microsoft’s signed deal is safe for now
Nebius’s Microsoft deal is already signed. Cerebras’s wafer-scale chips are built for fast inference, while Nebius rents out Nvidia GPUs for a wider range of AI work. So Cerebras adds to what Microsoft can run, and nothing in this week’s news changes the revenue Nebius already has under contract. GPUs are still scarce, too: Oracle said GPU capacity that came up for renewal in its August quarter was renewed or resold at a 20% premium, even though most of those chips were four years old or older.
But Nebius’s valuation rests on the deals that come after this one. Bottom line: Microsoft’s contract should keep paying Nebius for years. Meanwhile, Microsoft is lining up Cerebras, its own Maia chips and its own data centers. That makes it a less likely buyer of Nebius’s next big block of capacity, and a tougher negotiator when it does buy.
Delivery is the nearer test. Nebius said on Nov. 12 that it expects to deliver more than half of Microsoft’s capacity at the Vineland, New Jersey, site by year-end, with the remaining tranches pushed to the second quarter of 2027. Hitting that date would go a long way toward keeping Nebius on Microsoft’s shrinking list of neoclouds.
So what is Nebius stock actually worth?
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Disclaimer:
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