Why Nebius stock is tumbling despite beating Q3 revenue estimates?

Nebius NBIS shares tumbled on Thursday despite the neocloud reporting third-quarter results that beat revenue estimates.

The stock was down about 20% ahead of the opening bell, wiping out the roughly 15% gains recorded in the previous session.

Broader market conditions were also weighing on sentiment, with Nasdaq and S&P 500 futures trading in the red, while Dow futures held largely flat.

Nebius, a major AI-focused cloud provider, is often grouped with other neocloud specialists such as CoreWeave and IREN.

Nebius reports strong Q3 growth

Q3 earnings

Demand remains exceptionally strong, and we have the right mechanisms in place to capture it.

CEO of Nebius
Arkady Volozh

Nebius reported third-quarter revenue of $980.8 million, marking a 571% increase from the year-earlier period and exceeding analyst estimates of around $907.5 million.

Adjusted EBITDA came in at $465.8 million, while the company narrowed its net loss from continuing operations to $37.5 million, or 13 cents per share. That compared with a loss of 50 cents per share a year earlier.

The company also reported improvements in the economics of its customer contracts.

Prepayments on third-quarter deals covered more than 100% of the associated capital spending, a significant improvement from the 50%–60% recorded in the previous quarter.

Pricing continued to increase, with annual contract value exceeding $25 million per megawatt.

Nebius also signed its first multiyear agreements with major enterprise platforms, including Databricks, Datadog, Palantir and Snowflake.

In a letter to shareholders, founder and CEO Arkady Volozh struck an upbeat tone about the underlying business, highlighting the strength of demand and the company’s ability to capture it.

The company expects to break even on a pre-tax basis by the ​end of 2027.

Why is Nebius stock falling then?

Despite the strong quarterly numbers, investors appeared more concerned about the company’s outlook for the remainder of 2026 and its future investment requirements.

Management guided full-year 2026 revenue toward the lower end of its previously stated range of $3.0 billion to $3.4 billion, falling short of some market expectations.

FactSet estimates put full-year revenue at $3.35 billion, placing the consensus estimate much closer to the upper end of Nebius’ guidance range.

The company also raised its capital expenditure forecast for 2026 to approximately $27 billion, up from its earlier range of $20 billion to $25 billion.

For 2027, Nebius projected capital spending of $40 billion to $45 billion, indicating that its infrastructure expansion will require even greater investment in the coming years.

The elevated spending plans appear to have revived investor concerns about the scale and funding of the AI infrastructure build-out, particularly as companies in the sector continue to commit significant amounts of capital to expanding computing capacity.

Neocloud stocks continue to struggle

The sharp reversal in Nebius shares came just one day after CoreWeave’s stronger-than-expected results and raised guidance lifted the broader neocloud group, including Nebius.

CoreWeave’s performance had briefly eased concerns surrounding demand and financing across the AI infrastructure sector.

However, those concerns have resurfaced as investors assess the substantial capital requirements involved in expanding AI data centers.

CoreWeave has also plummeted over 12% in premarket trading after rising more than 24% in the previous session.

Heavy borrowing, elevated infrastructure spending and execution risks associated with the rapid expansion of computing capacity have remained key concerns for the sector.

The latest pressure on neocloud stocks has also coincided with controversy surrounding Nvidia CEO Jensen Huang.

Nvidia is a key technology supplier and investor to several neocloud operators, including Nebius.

With CoreWeave and Nebius swinging 20% or more in back-to-back sessions, sector volatility is likely to stay in focus for traders on online trading platforms.

AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.

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