In the week before Nebius released its earnings, fellow neocloud providers IREN and CoreWeave both reported results that beat market expectations.
Over the past month, concerns about a slowdown in AI infrastructure buildout have hammered related stocks, but this week these names rebounded. Nvidia has built a broad presence across the neocloud space, and volatility in the sector was further amplified by crisis developments surrounding CEO Jensen Huang.
On November 9, 2019, Arkady Volozh, then CEO of Nebius and Yandex, spoke at an AI development conference in Moscow.
On Thursday, publicly listed neocloud provider Nebius (NBIS) saw its shares fall 17%. The company's third-quarter results beat analyst revenue expectations, but its guidance disappointed.
Here is how the company's actual results compared with LSEG consensus estimates: Loss per share: $0.13; Revenue: $980.8 million versus $907.5 million expected.
A direct comparison of the loss per share with the $0.69 analysts had previously expected is not yet possible. The company said revenue surged 571% year over year in the quarter; it posted a net loss of $37.5 million, or $0.13 per share; in the same period last year, it reported a net loss of $119.6 million, or $0.50 per share.
In supplementary earnings materials, CEO Arkady Volozh said full-year 2026 revenue is expected to land at the low end of the company's guidance range of $3.0 billion to $3.4 billion, while the FactSet consensus estimate is $3.35 billion.
Nebius also introduced its first outlook for 2027: revenue of $12 billion to $13 billion, a target that "reflects a conservative view of the pace of business expansion"; the FactSet market estimate is $12.09 billion.
The company expects fiscal 2026 capital expenditures to reach $27 billion, above its previous guidance of $20 billion to $25 billion and above the FactSet market estimate of $23.85 billion. For fiscal 2027, capital expenditures are projected at $40 billion to $45 billion, far above the FactSet estimate of $28.77 billion.
Nebius Group (NBIS) Nasdaq real-time quote: $128.89, down $25.80 (16.68%), at 9:40 a.m. Eastern Time.
Just a week before Nebius disclosed its results, peer neocloud companies CoreWeave and IREN both reported earnings that exceeded market expectations. That positive news helped the sector recover after worries about whether AI compute buildout can continue had triggered sharp selloffs in related stocks. On Wednesday, the neocloud sector rose broadly: CoreWeave jumped nearly 25%, Nebius gained 15%, Applied Digital rose more than 7%, and IREN advanced nearly 6%.
But after Nebius released its third-quarter results, all of those stocks moved lower in Thursday premarket trading. Last week, CoreWeave bond yields spiked above 16%. On Tuesday's earnings call, CoreWeave told analysts it plans to keep parent-level debt financing to no more than $5 billion by 2027.
Nebius is racing against peers to build new data centers, and the political environment is further amplifying market volatility. Last week, U.S. voters cast ballots on referendum proposals to restrict data center development, while Democrats won major victories in both chambers of Congress. There is also the ripple effect from Nvidia. After a series of blockbuster revelations about Huang's extramarital affair, a Wednesday evening report said Nvidia's board plans to remove the co-founder. Nvidia has deeply cultivated the neocloud sector through investments and by providing funding guarantees for projects. According to U.S. SEC 13-F filings, as of the end of June, Nvidia held Nebius shares worth about $329 million.
Nebius disclosed that it completed a debt financing in the quarter. Management will hold a conference call at 8 a.m. Eastern Time to explain the results to analysts and further elaborate on the guidance.
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