Nebius Draws a Buy Rating as Nvidia's Funding Pause Exposes the Sector's Fragile Backbone

Nebius falls 23% in 30 days after Nvidia paused its AI cloud program, even as Truist initiates Buy coverage and Palantir names it a partner.

When Nvidia quietly pressed pause on a revenue-sharing and financing program for AI cloud providers — a scheme it had only launched in early July — the tremor ran straight through the neocloud corner of the market. Nebius was not singled out. CoreWeave and IREN stumbled alongside it, a reminder that these specialized infrastructure challengers rise and fall together on signals from a single chipmaker.

The pullback in Nebius shares has been steady rather than sudden. The stock closed yesterday at EUR 179.64, down 2.3% on the day, extending a 30-day decline to 23%. In today's session it is easing a further 1.7% to EUR 180.80, though that does little to dent a year-to-date advance of 146%.

A Vote of Confidence Arrives Anyway

Not everyone is rattled. Truist Securities initiated coverage of Nebius Group N.V. with a Buy rating and a USD 355.00 price target — a call that landed on September 10, with the primary article noting the launch on September 9. The analysts lean on capacity constraints across the industry and the earnings potential embedded in further buildout.

The timing lined up with a pair of appearances by Nebius management before institutional investors. The team presented at Goldman Sachs' Communacopia + Technology Conference on September 8, then followed up the next day at Citi's Global TMT Conference. The message at both: Nebius is positioning itself squarely against soaring demand for compute power to train and run demanding AI models.

Palantir Hands Over a Credibility Marker

Days before those conferences, Nebius locked in a partnership that gave its story extra weight. Palantir named the company its preferred partner for sovereign AI infrastructure, opening access to Nebius' compute and inference capacity for Palantir's eligible commercial customers. The arrangement brings prestige and helps fill utilization — but it does not sever Nebius from the supply and financing machinery of the dominant chipmaker.

The Capital Hunger Behind the Hype

Scaling to meet capacity demand is expensive, and Nebius has been tapping capital markets aggressively. Roughly a month ago the company completed a private placement of senior convertible notes, upsized to USD 5.0 billion and generating gross proceeds of about USD 5.75 billion. Reuters ranks the deal — which includes a USD 3.0 billion tranche carrying a 0.50% coupon — among the largest convertible bond issues ever.

Operationally, the momentum is striking. Second-quarter 2026 revenue climbed to USD 582.3 million, a 454% jump year over year, with several newly signed large contracts securing billions in volume. The cost of that expansion shows on the bottom line: adjusted EBITDA of USD 236.2 million sat alongside a net loss of USD 190.4 million for the quarter. Management nonetheless reaffirmed its 2026 guidance of USD 3.0 billion to USD 3.4 billion in revenue and a roughly 40% adjusted EBITDA margin by year-end.

Insider Filings Round Out the Picture

Regulatory disclosures show CEO Arkadiy Volozh and COO Nave Ophir each received 1,352 restricted share units in early September under the employee participation program, with directors Arne Grimme and Kira Radinsky granted identical allocations. CFO Alonso Sanchez Maria del Dado, meanwhile, sold 470 Class A shares at USD 196.00 apiece to cover tax obligations.

The question hanging over Nebius is not whether it can grow — the numbers answer that. It is how independently a neocloud can operate when one supplier's strategic pause is enough to shake the whole sector. Investors buying into the new cloud era should understand that, for now, the buildout still moves to someone else's beat.