Nebius Group shares fell about 18% on Thursday 12 November after the artificial intelligence cloud provider reported third-quarter revenue far above forecasts but raised its spending plans and pushed back its growth targets. The sell-off showed that, in the current market, a strong quarter is not enough when delivery dates slip and costs climb.

The shares were down 18.19% at $126.55 by mid-afternoon in New York, after falling more than 15% by midday. The drop came hours after Nebius published results before the market opened, and it left the stock still up 84% in 2026, even though it remains 46% below its all-time high.

Revenue beat, guidance cut

On the sales line, Nebius had an exceptional quarter. Revenue reached $980.8 million, up 571% from a year earlier and above the $907.5 million consensus forecast from analysts polled by LSEG. Adjusted earnings before interest, tax, depreciation and amortisation came in at $465.8 million, against a loss of $5.2 million in the same quarter last year.

The net loss from continuing operations narrowed to $37.5 million, or 13 cents a share, from $119.6 million, or 50 cents a share, a year earlier. About $325 million of the quarter's revenue was non-recurring income from a new asset-light partnership, in which partners fund computing capacity while Nebius supplies its architecture and cloud platform.

What unsettled investors was the outlook. Some third-party computing capacity that Nebius expected to have available by the end of this year has been delayed until the first half of 2027. Management said the contracts behind that capacity remain intact, but the company cannot recognise the revenue until the capacity comes online.

As a result, Nebius now expects full-year 2026 revenue at the low end of its previous $3 billion to $3.4 billion guidance range. It also pushed back its target for annualised revenue run rate of $7 billion to $9 billion from December to February 2027. The run rate stood at $6.4 billion at the end of September.

Spending keeps climbing

The second blow was the cost of expansion. Nebius raised its expected 2026 capital expenditure to about $27 billion, above its previous range of $20 billion to $25 billion and above the $23.85 billion analysts had expected. Spending in the third quarter alone was about $7.3 billion.

For 2027, the company guided capital expenditure of $40 billion to $45 billion, far above the $28.77 billion analysts had forecast, alongside revenue of $12 billion to $13 billion. Management said it expects to reach pre-tax break-even in the fourth quarter of next year, and to fund much of the spending through customer prepayments, asset-backed financing and its balance sheet.

To help pay for the build-out, Nebius secured a $3.5 billion financing facility with Citi in October, adding to billions already raised through convertible debt and other financing. Chief executive Arkady Volozh told investors in a shareholder letter that the delayed capacity had forced the lower end of the revenue range, while demand for its computing power remained strong.

Neocloud stocks under pressure

Shares in other AI cloud operators, including CoreWeave and IREN, also fell on Thursday, but Nebius fell furthest, pointing to its own report as the main cause rather than a sector-wide move. The pattern echoes a wider reassessment of the AI infrastructure boom, in which investors are asking whether the huge sums being spent on data centres will convert into revenue on schedule.

Nebius argues that its problem is delivery, not demand. Its remaining performance obligations, a measure of contracted future work, rose to $38.7 billion at the end of September from $37.5 billion three months earlier. The test now is whether it can bring the delayed capacity online in the first half of 2027 without pushing its targets back again.

Sources: The Motley Fool, MLQ.ai