(Reuters) -Nebius Group ( NBIS ) has signed a deal worth about $3 billion with Meta to provide the Facebook owner with AI infrastructure over a five-year period, the company said on Tuesday, after it reported a more than fourfold rise in third-quarter revenue.

The company's shares, however, slipped more than 3% in early trading, after it posted a surge in capital spending and a quarterly loss of over $100 million, widening from $39.7 million last year.

The stock has been on a strong run this year, with its market value rising fourfold to $27.61 billion, through last close.

The agreement with Meta underscores the surging demand for high-performance computing power that is required to build and run artificial intelligence models.

It is Nebius' ( NBIS ) second contract with a hyperscaler, following its $17.4 billion deal with Microsoft ( MSFT ) in September.

Nebius ( NBIS ) said it would deploy the capacity needed for the Meta contract over the next three months, adding that the demand was so strong that the size of the contract had to be limited to the capacity that Nebius ( NBIS ) had available.

Amsterdam-based Nebius ( NBIS ) is among a group of so-called neocloud companies that offer hardware and cloud capacity as services. Its core business involves providing Nvidia graphics processing units and AI cloud, helping companies expand their AI infrastructure.

Nebius ( NBIS ) and its larger rival CoreWeave ( CRWV ) have seen strong demand this year as insatiable AI appetite has left even the biggest cloud companies, such as Microsoft ( MSFT ) and Amazon, with capacity constraints.

Nebius ( NBIS ) reported a 355% jump in revenue to $146.1 million in the third quarter ended September.

The company is targeting $7 billion to $9 billion in annualized run-rate revenue by the end of 2026, compared with its ARR of about $551 million at September-end.

Its capital expenditures ballooned to $955.5 million in the September quarter, from $172.1 million a year earlier, as the company invests heavily in securing GPUs, land and power.