Nebius shares plunged about 20% in premarket trading on Thursday, erasing the previous session's gains, even after the AI-focused cloud provider reported third-quarter revenue that exceeded analyst expectations. The selloff came as investors weighed the company's softer-than-expected 2026 revenue guidance and a significant increase in capital expenditure plans.
The company posted revenue of $980.8 million for the third quarter, a 571% jump from the same period last year and above the consensus estimate of approximately $907.5 million. Adjusted EBITDA reached $465.8 million, while the net loss from continuing operations narrowed to $37.5 million, or 13 cents per share, compared with a loss of 50 cents per share a year earlier.
Nebius also highlighted improvements in contract economics, noting that prepayments on third-quarter deals covered more than 100% of associated capital spending, up from 50%–60% in the prior quarter. Pricing continued to strengthen, with annual contract value exceeding $25 million per megawatt. The company also signed its first multiyear agreements with major enterprise platforms, including Databricks, Datadog, Palantir, and Snowflake.
Despite these positive operational metrics, management guided full-year 2026 revenue toward the lower end of its previously stated range of $3.0 billion to $3.4 billion. FactSet consensus had pegged 2026 revenue at $3.35 billion, closer to the upper end of the range, making the guidance a disappointment.
More concerning to investors was the company's updated capital expenditure forecast. Nebius now expects to spend approximately $27 billion in 2026, up from its earlier projection of $20 billion to $25 billion. For 2027, the company plans capital spending of $40 billion to $45 billion, signaling an aggressive infrastructure expansion that will require substantial funding.
The elevated spending plans revived concerns about the scale and financing of the AI infrastructure build-out. Neocloud providers like Nebius and CoreWeave have been committing enormous capital to expand computing capacity, often relying on debt and equity markets. Heavy borrowing and execution risks remain key worries for the sector.
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. CoreWeave also fell over 12% in premarket trading after surging more than 24% in the previous session, highlighting the sector's volatility.
Adding to the pressure, broader market sentiment was weak, with Nasdaq and S&P 500 futures trading lower. The selloff also coincided with controversy surrounding Nvidia CEO Jensen Huang, as Nvidia is a key technology supplier and investor in several neocloud operators, including Nebius.
Nebius expects to break even on a pre-tax basis by the end of 2027, but the path to profitability is now clouded by the massive investment requirements. Investors are closely watching how the company will fund its expansion and whether demand will keep pace with the rapid build-out of AI data centers.
This article is for informational purposes only and does not constitute financial advice.
