Nebius: A $775 Million Credit Line Calms Dilution Fears, But the Growth Story Faces a Harder Sell

Nebius shares drop 43% from highs as $20B+ capex dwarfs $3B revenue, but $775M credit facility and $40B order book offer some relief.

The math behind Nebius Group is stark, and investors have been voting with their feet. Over the past month, the stock has shed roughly a third of its market value, closing Tuesday at €148.90 after a 9.77% single-day slide. That puts the shares 42.95% below the 52-week high of €261.00 reached just five weeks ago. Yet on Wednesday, the stock edged higher — a tentative sign that the selling may have run its course, at least for now.

The tension at the heart of the Nebius narrative is simple: explosive growth versus punishing capital intensity. The AI cloud business posted first-quarter revenue growth of 841% and an adjusted EBITDA margin of 45%, but depreciation on property and equipment already consumed 53% of group revenue, producing an operating loss of $128 million. For the full year, management expects capital expenditure between $20 billion and $25 billion — against revenue guidance of just $3.0 billion to $3.4 billion. In Q1 alone, capex hit $2.47 billion, 6.2 times quarterly sales.

That mismatch has fueled a debate over how Nebius will fund its ambitions without drowning shareholders in dilution. The company has now offered a concrete answer: a secured credit facility of approximately $775 million, priced at SOFR plus 250 basis points. The structure is designed to reduce reliance on equity issuance, and the market had clearly priced in a worst-case financing scenario that this deal partially defuses.

The balance sheet still offers some cushion. Nebius ended the first quarter with $9.30 billion in cash against $8.45 billion in liabilities, and Nvidia remains a strategic backer with a $2 billion investment that gives it a 9.3% stake. The order book — contracted revenue from clients including Microsoft and Meta — stands at over $40 billion, and a recent compute agreement with Reflection AI added more than $1 billion to that total. Multi-year demand from investment-grade customers provides the kind of revenue visibility that should, in theory, reduce execution risk.

But the bears have legitimate arguments. The sheer scale of the capex program means future capital raises cannot be ruled out, particularly around delivery milestones. Competition is intensifying: reports that Meta plans to sell excess compute capacity sent shares of both CoreWeave and Nebius down 12% to 15% in a single session. If hyperscalers begin dumping spare capacity onto the market, the pricing power of neocloud providers could erode over time. Regulatory headwinds are also building — New York has imposed a one-year moratorium on new hyperscale data centers, a reminder that infrastructure expansion does not happen in a vacuum.

Analyst opinions reflect the uncertainty. Baird rates the stock a Buy with a $250 target, while Northland is far more bullish at $410. One analyst recently lifted his price target to $200 and upgraded the stock to Buy, implying roughly 10% upside from current levels — modest by the standards of a stock that has rallied 240% over the past twelve months. On the other side, bearish voices on Seeking Alpha continue to flag dilution risk and capital intensity as structural drags on further upside.

Insider selling has added another layer of unease. Both CEO Arkady Volozh and a board member have recently reduced their holdings, a move that some interpret as a warning signal and others as routine portfolio rebalancing after a sharp rally.

Technically, the stock looks oversold. The relative strength index sits at 38.3, and the share price is 24.87% below its 50-day moving average — but still 22.61% above the 200-day average. That gap between short-term and long-term trends is characteristic of a sentiment-driven pullback within a broader uptrend, not a structural breakdown.

The company is also trying to shift its model. Volozh has outlined an "asset-light" strategy in which partners shoulder some of the infrastructure burden, arguing that software partnerships can deliver broader customer access at better margins. Whether that pivot can close the gap between growth and profitability — and convince investors that the current sell-off is a buying opportunity rather than the beginning of a re-rating — remains the central question for Nebius.