Nebius Shares Slide Despite Robust Quarterly Results As Data Center Setbacks Weigh on Outlook

Nebius Group shares extended a recent market sell-off, declining 9.78% to trade at $116.05 as investors reacted to a softer revenue projection for 2026 and operational postponements at a key facility. The drop followed a nearly 17% decline in the previous session, pressured by broader neocloud sector weakness and industry developments. Despite the near-term headwinds, Rosenblatt Securities maintained a bullish stance on the company.

Rosenblatt analyst John McPeake kept a Buy rating and a $304 price target on Nebius, noting that the firm surpassed all major third-quarter financial expectations. According to the analyst, revenue multiplied more than sixfold year-over-year, beating his projection by 7%, while earnings before interest, taxes, depreciation, and amortization exceeded estimates by 57%. However, the company adjusted its 2026 revenue forecast downward due to a delayed rollout at its Vineland, New Jersey, data center site.

The 300-megawatt Vineland facility, largely reserved by Microsoft under a $17.4 billion contract spanning through 2031, experienced setbacks after the site landlord halted temporary diesel power operations sooner than anticipated. Nebius now anticipates the facility to launch in 2027. McPeake described the setback as a minor flaw in an otherwise stellar quarter, adding that robust artificial intelligence demand could potentially allow Nebius to command higher pricing if the agreement were altered.

To support expansion, customer prepayments fully covered third-quarter capital expenditures, and the company plans to fund 75% to 85% of 2027 spending through similar prepayments and asset-backed financing. Nebius also raised its 2026 capital spending midpoint to build out over one gigawatt of new capacity, alongside projected 2027 capital expenditures between $40 billion and $50 billion.

What to watch next: Monitor upcoming infrastructure deployment updates for the Vineland data center and any shifts in capital expenditure efficiency.