Nebius Shares Experience Sharp Swings Amid Sector Turbulence

Nebius shares fell sharply despite strong growth and a $20B backlog, highlighting the sector's volatility after a peer's weak report triggered a broad sell-off.

The stock of cloud infrastructure provider Nebius faced significant pressure in Friday's trading session, dragged lower by a broad sell-off in the AI infrastructure sector. The downturn was triggered by a disappointing report from larger industry peer CoreWeave, despite no company-specific news from Nebius itself. This reaction underscores the high correlation and sensitivity within this emerging "Neocloud" investment niche.

At its lowest point, Nebius shares were down 14.9%, while CoreWeave plummeted 21.9%. Both companies are expanding revenue at a rapid pace but continue to report substantial losses as they invest heavily in data center capacity to sell AI computing power. The session began on a weak note for Nebius, with its stock opening at $98.70—a notable gap down from its previous closing price of $104.88.

Strong Growth Contrasts with Quarterly Miss

This recent pullback comes just two weeks after the release of Nebius's fourth-quarter 2025 results, which presented a mixed financial picture. Revenue came in at $227.7 million, falling short of the consensus estimate of $246 million. However, the year-over-year growth figure remains staggering, with the company reporting a 547% increase.

A standout performer was the cloud computing segment, which surged 830%. The quarter also saw Nebius reach a critical operational milestone, achieving positive adjusted EBITDA for the first time. Nonetheless, the bottom line remained deep in the red. The company reported a loss per share of -$0.69, missing analyst expectations of -$0.42 by $0.27.

A Substantive Backlog Provides Foundation

A key pillar supporting the bullish thesis for many investors is the company's secured contractual pipeline. Nebius holds a five-year, $3 billion agreement with Meta, signed in November 2025, and a separate five-year contract with Microsoft valued at over $19 billion. Combined, this represents a committed backlog exceeding $20 billion.

Management confirmed the first delivery tranche for Microsoft was completed on schedule in November 2025, with further deliveries spaced throughout 2026. During the earnings call, executives also highlighted that the number of contracts with terms longer than twelve months had nearly doubled compared to the third quarter, while the average selling price had increased by more than 50%.

Further strengthening its financial position, Nebius received approximately $830 million in customer prepayments during Q4. These funds are intended to support capacity expansion and reduce reliance on external capital markets.

Strategic Acquisition and Aggressive 2026 Targets

Shortly before its Q4 report, Nebius made a strategic move by announcing the acquisition of Tavily on February 10, 2026. Tavily is a provider of "agentic search" tools for enterprise clients. According to insider reports, the purchase price is $275 million, and Tavily's founder and CEO, Rotem Weiss, is expected to join Nebius. The deal aims to integrate real-time search infrastructure into Nebius's AI cloud platform, accelerating the development of an environment where businesses can build and operate autonomous AI agents.

Concurrently, management has outlined an ambitious roadmap for 2026. The company forecasts revenue between $3.0 and $3.4 billion, with an annual recurring revenue (ARR) target of $7 to $9 billion by year-end, alongside an adjusted EBITDA margin of 40%. Operationally, Nebius plans to increase its data center locations from seven in 2025 to sixteen. Active capacity is projected to expand to between 800 megawatts and 1 gigawatt by the end of 2026, a massive jump from 170 megawatts at the close of the prior year. Planned projects include a new 240-megawatt data center in France, which upon completion is slated to be among the largest in Europe.

To fund this growth, Nebius has earmarked capital expenditures of $16 to $20 billion for 2026, noting that approximately 60% of the required financing is already secured. In a separate strategic financing move, the company secured $700 million from Nvidia, a package that also includes access to high-end GPUs. Reports indicate these processor units can be acquired at discounts of around $20,000 per unit.

Friday's sharp decline serves as a reminder of the fragile sentiment prevailing in this high-growth sector, where negative news from one player can swiftly impact the entire group—even for companies boasting explosive growth rates and substantial order books. Investors will gain their next detailed insight into Nebius's progress with the release of its quarterly figures on April 29.