Nebius Falls 25% as Analyst Calls Data Center Delay a 'Slight Blemish'

# Nebius Falls 25% as Analyst Calls Data Center Delay a 'Slight Blemish'

Nebius Group (NASDAQ:NBIS) traded at $115.88 on Friday, down 25.09% intraday within a range of $109.00 to $123.97, extending a nearly 17% sell-off from the prior session. Investors weighed a lowered 2026 revenue forecast and a delay at the company's Vineland, New Jersey, data center against a third quarter that beat expectations on every major line. NVIDIA Corp. (NASDAQ:NVDA) traded at $162.85, down 6.26% and ranging between $158.39 and $170.00. Rosenblatt Securities analyst John McPeake maintained a Buy rating and a $304 price forecast on Nebius, calling the Vineland slip a "slight blemish" on an otherwise strong quarter.

Context — Why the Nebius Sell-Off Matters Now

The Vineland facility is a 300-megawatt site largely booked by Microsoft Corp. (NASDAQ:MSFT) under a $17.4 billion agreement running through 2031. That contract anchors a large share of Nebius' contracted future revenue, so any delay in bringing capacity online shifts the timing of cash flows even when the underlying demand is unchanged. McPeake attributed the slowdown to site landlord DataOne shutting down temporary diesel power operations earlier than expected, which pushed the rollout back. Nebius now expects the site to become operational in 2027.

The analyst's decision to hold his rating and target through a double-digit drawdown separates this event from a fundamental downgrade. He described the disruption as temporary and kept his bullish stance, meaning the sell-off is a repricing of timing rather than a change in the demand thesis. Nebius itself guided 2026 revenue lower, so the company acknowledged the near-term hit directly rather than framing it as noise.

The broader neocloud complex absorbed two unrelated shocks in the same window. NVIDIA CEO Jensen Huang's resignation and a wider loss at rival Nscale both pressured the group, according to the report. Those events are separate from Nebius' own operational issue, but they hit a sector where investors already price in execution risk around power, land and construction timelines.

The macro backdrop offers no offset. NVIDIA, the sector's bellwether, fell 6.26% on the day, and its range of $158.39 to $170.00 shows the weakness was broad rather than a single-print flush. When the reference name for AI infrastructure sells off, smaller neocloud operators typically trade with higher beta in both directions, which amplifies moves like Nebius' 25% decline.

Data — What the Numbers Show

The third-quarter results were the counterweight to the guidance cut. Revenue grew more than sixfold year over year, beating McPeake's forecast by 7%. EBITDA topped his estimate by 57%, a margin outperformance far larger than the revenue beat, which suggests operating use improved faster than the top line.

Against that, management lowered its 2026 revenue forecast and raised the midpoint of its 2026 capital spending forecast by 20% to support more than 1 gigawatt of new capacity. The spending increase and the revenue reduction moved in opposite directions, which is the combination that unsettled the tape.

Metric	Reported	Analyst estimate
Q3 revenue growth	More than 6x YoY	Beat by 7%
Q3 EBITDA	Above estimate	Beat by 57%
2026 capex midpoint	Raised 20%	—
2027 capex	$40B-$50B	$30B (McPeake), $28B (Street)

The 2027 capital expenditure guide of $40 billion to $50 billion sits well above both McPeake's $30 billion estimate and Wall Street's $28 billion forecast. Nebius also expects to break even before taxes in the fourth quarter of 2027, versus a prior analyst forecast of a $347 million pretax loss.

Funding for that buildout leans on customer money. Customer prepayments covered all of Nebius' third-quarter capital expenditures, and for 2027 the company expects prepayments and asset-backed financing to fund 75% to 85% of capital spending. It also holds more than $40 billion in investment-grade contract revenue that could support additional financing.

Analysis — What It Means for Markets and Tickers

The read-through for the neocloud sector is that demand visibility and delivery timing are being priced as two different things. Nebius' $40 billion-plus in investment-grade contract revenue is unchanged by a construction delay, yet the equity lost a quarter of its value intraday. That gap tells you the market is discounting execution risk, not contract risk.

Microsoft is the counterparty most directly exposed to the Vineland timeline. The $17.4 billion agreement runs through 2031, so a 2027 start date compresses the period over which Nebius can recognise that revenue. McPeake argued that strong AI demand could let Nebius secure higher prices if Microsoft cancelled, which frames the contract as replaceable rather than stranded. That is a claim about pricing power, not a guarantee.

The counter-argument is financing. Nebius plans $40 billion to $50 billion of 2027 capex against a $28 billion Street estimate, and the funding mix depends on prepayments and asset-backed structures landing as planned. If capital markets tighten or customers slow prepayment schedules, the gap between planned and funded spending widens. The company did not disclose terms for those financing arrangements.

Positioning reflects that tension. The 25% intraday drop on top of a 17% prior-session decline shows holders reducing exposure into uncertainty, while Rosenblatt's maintained Buy and $304 target signals at least one institutional desk is treating the move as a timing discount rather than a thesis break. Flow is moving toward names with visible, contracted capacity already energised.

Outlook — What to Watch Next

The Vineland operational date is the first checkpoint. Nebius expects the site to come online in 2027, and any earlier or later signal from DataOne on power restoration would reset the timeline. Watch whether Microsoft's $17.4 billion agreement is reaffirmed on its existing schedule.

The 2027 capex range of $40 billion to $50 billion is the second marker. If the company narrows that range toward the lower end while holding the 1 gigawatt capacity target, it would ease the financing question that the Street's $28 billion estimate implies. McPeake said he expects continued forecast volatility as Nebius scales, and he modestly raised his overall estimates.

The fourth-quarter 2027 pretax breakeven is the third catalyst. Analysts previously modelled a $347 million pretax loss for that period, so any guidance update that confirms or moves that date carries outsized weight. On price, the session range of $109.00 to $123.97 defines the near-term band, with $109.00 the low tested during Friday's decline.

Frequently Asked Questions

Why did Nebius stock fall 25% on Friday?

Two forces combined. Nebius lowered its 2026 revenue forecast and pushed its Vineland data center to a 2027 operational date after landlord DataOne shut down temporary diesel power earlier than expected. Separately, NVIDIA CEO Jensen Huang's resignation and a wider loss at rival Nscale pressured neocloud stocks broadly. NBIS traded at $115.88, down 25.09% intraday, after falling nearly 17% the prior session.

Does Rosenblatt still rate Nebius a Buy after the guidance cut?

Yes. Analyst John McPeake maintained a Buy rating and a $304 price forecast on Thursday, describing the Vineland delay as a "slight blemish" on an otherwise strong quarter. He said Nebius exceeded all major third-quarter expectations, with revenue beating his forecast by 7% and EBITDA by 57%, and he expects the disruption to be temporary while modestly raising his overall estimates.

How is Nebius funding its data center expansion?

Customer prepayments covered all of Nebius' third-quarter capital expenditures. For 2027, the company expects prepayments and asset-backed financing to fund 75% to 85% of capital spending, with more than $40 billion in investment-grade contract revenue available to support additional financing. Nebius raised the midpoint of its 2026 capex forecast by 20% and guides 2027 capex of $40 billion to $50 billion.

Bottom Line

Nebius lost a quarter of its market value on a timing delay, while Rosenblatt kept its Buy rating and $304 target intact.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.