Nebius Group (NBIS) hit a record closing price of $286.69 on June 18, but shares have since tumbled to around $165, a decline of roughly 40%.
Much of that decline is concentrated in October alone, with the stock shedding approximately 30% during that month without any major negative company announcement driving the selloff.
Despite the sharp correction, investors who bought NBIS shares in January are still sitting on roughly a double, even after accounting for the recent losses.
The broader AI cloud rental sector appears to be under pressure, with fellow infrastructure provider CoreWeave falling by a comparable amount in October, suggesting a market-wide reassessment of AI compute companies.
Nebius itself offered no alarming updates during October, with its announcements limited to a small software acquisition and a new developer-training program.
The company has not altered its 2026 financial guidance since reaffirming it alongside its second-quarter earnings report in August, leaving the outlook unchanged heading into the critical back half of the year.
Revenue growth at Nebius has been striking, climbing from roughly $228 million in the fourth quarter of 2025 to $399 million in the first quarter of 2026, then reaching $582 million in the second quarter, a 454% year-over-year increase.
However, sequential growth did decelerate, slipping from 75% quarter-over-quarter in Q1 to 46% in Q2, even as each quarter still added more than $170 million in new revenue.
Management is targeting full-year 2026 revenue of $3.0 billion to $3.4 billion, along with a year-end annualized run rate of $7 billion to $9 billion, which implies a dramatic acceleration.
With just $981 million earned in the first half of 2026, Nebius must generate approximately $2 billion in the second half to reach even the low end of its own guidance range.
That would require averaging roughly $1 billion per quarter, representing approximately 75% more revenue than the company recorded in its most recent quarter.
Chief financial officer Dado Alonso addressed the path forward on the August earnings call, stating that Nebius expects “capacity deployed late in Q2 to begin contributing to revenue in Q3.”
Whether that new capacity translates into the revenue needed will become clearer when the third-quarter report is released, making that a pivotal moment for the stock.
Building out that capacity is proving expensive, with capital expenditures reaching approximately $5.7 billion in the second quarter alone, placing significant pressure on the balance sheet.
Nebius also swung to a net loss from continuing operations of around $190 million in the quarter, after a large investment gain from the prior year period did not repeat.
Customer concentration remains a notable risk, with three customers accounting for 59% of second-quarter revenue, leaving the company exposed to outsized dependency on a small group of clients.
The company’s signed backlog of contract revenue not yet recognized reached approximately $37.5 billion by the end of the second quarter, up from about $33.6 billion at the end of March.
Even with the 40% pullback from its peak, the stock still appears to be pricing in significant execution on the back-half revenue ramp, leaving limited margin for error if capacity deployment stumbles.
