Nebius Investors Reprice the Wait for Cash Flow

Nebius is finding that the hardest part of a fast-growing AI infrastructure story may not be demand, but patience. After the stock fell -9.8% yesterday, the market’s focus shifted again to how long investors are willing to fund the company’s expansion before it begins to generate positive free cash flow.

That reassessment came after higher than expected US inflation data and rising expectations for interest-rate increases, which Reuters said weighed on AI infrastructure names. For Nebius, the question is not simply how much compute customers want. It is whether the business can finance its build-out at a time when capital is becoming more expensive.

The company has already raised more than 2 Mrd. US-Dollar through a share issue this year, yet that is only one piece of a much larger funding picture. Nebius plans investments of 20–25 Mrd. US-Dollar for 2026, while its debt was recently cited at 10,1 Mrd. US-Dollar, up from 1,2 Mrd. US-Dollar a year earlier. It has also issued convertible bonds worth 5,75 Mrd. US-Dollar. Taken together, those figures show an expansion program that has already leaned on several financing channels.

Rosenblatt remains constructive despite the pressure. The broker has a buy rating on Nebius and a price target of 304 US-Dollar, having initiated coverage on 7 October. Its case rests on a business that is scaling quickly: quarterly revenue came in at 582,3 Mio. US-Dollar, up 454% year on year, while adjusted earnings before interest, taxes, depreciation and amortisation reached 236,2 Mio. US-Dollar.

Still, the same analysis underscores how distant self-funding remains. Rosenblatt expects positive free cash flow only in 2034. It also put free cash flow for the reported second quarter at -3,41 Mrd. US-Dollar. That combination leaves investors weighing strong operating momentum against a very long runway before the company is cash generative.

The scale of the opportunity is part of what keeps the stock in play. Rosenblatt said Microsoft and Meta account for more than half of a reported order backlog of over 40 Mrd. US-Dollar. That does not mean the cash is already in hand, but it does give the growth story a concrete foundation. An order book and available funding are not the same thing, though both matter when a company is trying to expand this quickly.

Sector worries have added to the scrutiny. Gartner warned that, if the current pace of expansion continues, more than 80% of neocloud providers could disappear as independent companies by 2030. The forecast is conditional rather than a direct call on Nebius itself, but it captures the pressure now facing the wider AI infrastructure market: capacity alone does not guarantee a durable business.

Options trading also reflected the jump in uncertainty. According to CNBC, Nebius options volume yesterday reached almost four times the average of the past 30 days. That does not by itself reveal which side of the market is more active, but it does suggest a sharp rise in interest around the name.

For now, the stock’s appeal still hinges on a familiar trade-off. The company has shown it can grow fast, and demand is clearly there. The harder question is whether Nebius can keep financing that growth long enough for the economics to catch up.