Nebius Shares Face Persistent Selling Pressure

Nebius shares drop after Q4 revenue and EPS miss estimates. Despite the quarterly shortfall, the company maintains aggressive 2026 targets and has a massive $20B+ contract backlog.

The stock of cloud infrastructure provider Nebius continues to struggle in the wake of its latest quarterly earnings release. After a sharp decline on Friday, the equity extended its losses in early trading on Monday. Investors are grappling with a clear dichotomy: the company's robust, contractually secured demand and aggressive expansion plans stand in contrast to quarterly results that fell significantly short of market expectations.

Disappointing Figures Trigger Decline

The recent volatility was sparked by the Q4 2025 financial results, published approximately one week ago. For the fourth quarter, Nebius reported revenue of $227.7 million. While this represented a staggering 547% increase year-over-year, it missed the analyst consensus estimate of $246 million. The company's earnings per share came in at -$0.69, worse than the anticipated -$0.42.

This earnings miss translated directly into market action. On Friday, the share price plunged 9% to close at $97.92. Trading volume was notably high at around 17.2 million shares, roughly 24% above the typical daily average of approximately 13.9 million. The previous Thursday's closing price was $107.61. In early Monday trading, according to Robinhood data, the stock was quoted near $94.80, moving it further from its 52-week high of $141.10.

Forward-Looking Metrics Paint a Brighter Picture

Despite the quarterly shortfall, the company's forward-looking metrics and guidance remain decidedly ambitious. Management confirmed its targets for 2026, including an annualized run-rate revenue of $7 to $9 billion by year-end and a full-year revenue forecast of $3.0 to $3.4 billion.

Key operational metrics also showed strength. The active data center power capacity reached about 170 megawatts by the end of 2025, surpassing the previously stated goal of 100 MW. Annual Recurring Revenue (ARR) jumped to $1.25 billion, a 127% increase from the prior quarter. Furthermore, Nebius raised its forecast for contracted power capacity from over 2.5 gigawatts to more than 3 GW.

The infrastructure expansion plan is aggressive. Nebius aims to increase its number of data center locations from seven at the end of 2025 to 16 by the close of 2026. Connected power capacity is projected to rise to between 800 MW and 1 GW, up from 170 MW at the end of last year.

Major Contracts and Meta's Plans Provide Backlog Support

The company's substantial contract backlog provides a foundation for its growth narrative. Nebius counts Meta Platforms as a customer, with a reported five-year, $3 billion agreement awarded in November 2025. This is supplemented by a separate five-year deal with Microsoft valued at over $19 billion. Combined, these contracts contribute to a reported backlog exceeding $20 billion.

Adding to the sector tailwinds, Meta recently announced its own substantial investment plan for 2026, with capital expenditures projected between $115 and $135 billion. This midpoint represents a roughly 74% increase over the prior year. Meta also stated its intention to purchase "millions" of Nvidia Blackwell and Rubin GPUs, deploying them through Nvidia's cloud partner network—a network of which Nebius is a member.

Analyst Sentiment and the Capex Challenge

Following the earnings report, the overall analyst tone has remained predominantly positive, despite the Q4 miss. On February 18, Compass Point initiated coverage with a "Buy" rating and a $150 price target. BWS Financial reaffirmed a "Buy" rating with a $130 target the day prior. According to MarketBeat, the consensus rating among 11 analysts stands at "Moderate Buy," with an average price target of $143.22.

However, dissenting views exist, with at least one firm maintaining a "Sell" rating on the shares. A central concern for near-term valuation remains the company's massive planned capital expenditure. Nebius anticipates 2026 Capex in the range of $16 to $20 billion.

In the coming months, a key factor will likely dictate how the market evaluates the Nebius story: the speed at which the company can convert its contracted power capacity into connected, revenue-generating infrastructure. This challenge is underscored by the fact that new capacity came online late in the fourth quarter, providing only a narrow window for revenue contribution. The market's patience will be tested as it watches this execution closely.