Nebius: The $50 Billion Question Hanging Over a Stock Down 36% From Its Peak

Nebius shares slide 37% from record high despite $50B backlog and strong demand; market weighs capex timing vs. future revenue.

There is a peculiar disconnect playing out in the shares of Nebius. The stock has shed more than a third of its value since late June, yet the company's order book has never looked healthier. Resolving that contradiction — whether the market is pricing in genuine risk or simply catching its breath after an extraordinary run — is now the central debate around the AI infrastructure group.

At Friday's close, the shares stood at €164.90, up 0.94 percent on the day. That modest bounce does little to mask the scale of the recent retreat: a 14.56 percent decline over the past month and a 36.82 percent drop from the record high of €261.00 reached at the end of June. The stock is now trading roughly 15 percent below its 50-day moving average of €196, a level that had been acting as a reference point for the medium-term trend.

The Gap Between Spending and Revenue

The immediate trigger for the sell-off is a capital plan that has given investors pause. Nebius has lifted its 2026 investment forecast to between $20 billion and $25 billion, all of it earmarked for AI infrastructure expansion. The complication: most of that new capacity will not generate meaningful revenue until early 2027. That lag between cash going out the door and income coming back in has become the central preoccupation for shareholders.

The company's own guidance attempts to bridge that gap. Management insists every contract for new capacity will begin generating revenue by the end of 2026, even as it concedes the bulk of the infrastructure will only deliver substantial contributions in the first months of 2027. The market, for now, is applying a discount for exactly that uncertainty.

The Bull Case: Demand Is Not the Problem

On the demand side, the story remains remarkably strong. Nebius holds contracted backlog of more than $50 billion, with total power capacity exceeding 3.5 gigawatts. The anchor customers carry serious weight: Microsoft has committed $17.4 billion through 2031, while Meta Platforms has signed on for $27 billion over five years.

The first-quarter numbers for 2026 were nothing short of extraordinary. Revenue jumped 684 percent year over year to $399 million, with the AI cloud business growing 841 percent. Annualized recurring revenue has reached a run rate of nearly $2 billion, and management is targeting a corridor of $7 billion to $9 billion by year-end.

Expansion continues at pace. Nine new data centers have been announced, with more than 2 gigawatts of power capacity under contract and the prospect of over 3 gigawatts. By the end of 2026, the company expects to have an additional 800 megawatts to 1 gigawatt of available data center capacity. Should that pipeline convert into billable capacity at the planned tempo, the current discount could prove temporary — the twelve-month gain of 254 percent is a reminder of how quickly sentiment can shift when promises turn into execution.

There is also a fresh operational milestone worth noting. A Vera Rubin compute rack has officially gone live at the data center in Mäntsälä, Finland. This is more than a technical footnote: the Vera Rubin architecture underpins the $12 billion capacity tranche of the Meta agreement. Without validation in Finland, no revenue from that deal can be billed.

The Bear Case: Capital Intensity and Concentration

The counter-argument centers on the financing burden. Critics point to heavy capital intensity, potential dilution risk, and uncertain long-term economics. The rapid growth, they argue, masks structural issues: substantial depreciation charges, massive capital expenditures, and dependence on a handful of large, non-recurring contracts.

The first-quarter figures lend some support to that concern. Depreciation totaled $212 million — 53 percent of revenue — and the company posted an operating loss of $128 million. Competitive pressure adds another layer: worries that Meta Platforms might commercialize excess AI compute capacity through its "Meta Compute" program have weighed on both Nebius and rival CoreWeave.

Insider selling has compounded the unease. Regulatory filings with US authorities show executives — including the CEO, chief technology officer, and infrastructure chief — sold shares worth more than $140 million over the past quarter. With annualized 30-day volatility near 148 percent, any negative surprise on capacity conversion or hyperscaler demand could trigger another sharp downward move before the longer-term uptrend reasserts itself.

Reading the Technical Picture

The chart tells a story of correction within an intact longer-term trend rather than a structural breakdown. The 200-day moving average sits at €122.67, leaving the stock more than 34 percent above that level. The RSI of 46.2 sits in neutral territory — neither oversold nor overheated — which argues against reading the recent decline as capitulation.

The sell-off since the June peak fits a broader pattern: investors have retreated sector-wide from richly valued AI infrastructure names. Last Friday, Nebius dropped around ten percent intraday while the S&P 500 edged higher. CoreWeave and IREN Limited also came under pressure the same week — a sector-wide de-risking among chip-related equities rather than a company-specific problem.

Financing Looks Firmer Than the Share Price Suggests

On the funding side, the picture appears more stable than the falling share price might imply. Nebius recently closed the first secured credit facility in the neocloud sector, backed by installed GPU hardware and contracted customer revenue. The facility totals $775 million, priced at SOFR plus 2.50 percentage points, with a maturity of October 2030. This structure reduces near-term dilution risk compared with a pure equity raise, even as it naturally increases leverage.

What Happens Next

The next concrete test arrives with second-quarter results, expected in early August — one source points to August 12 as the key date. That report will show whether order conversion and utilization confirm that the Vera Rubin milestone is actually generating revenue, or whether it remains a one-off marketing moment. Additional context should come at the upcoming annual general meeting.

Until those numbers demonstrate that new capacity is translating into billed revenue, the stock is likely to remain in a wide, volatility-driven range without a clear directional bias. The bull case rests on the contracted backlog converting into 2026 and 2027 revenue as planned, supporting a recovery toward the 50-day average near €196. The bear case warns that delayed capacity delivery or hyperscaler competition eroding pricing power in the AI cloud business could push the shares toward the 100-day average at roughly €163, or lower.

For now, the evidence — contracted revenue, a live next-generation hardware system, and a sector-wide rather than company-specific sell-off — suggests treating the recent decline as a pause within a longer uptrend rather than its reversal. The extreme volatility of the stock, however, means that thesis can be tested quickly.