Nebius Group (NASDAQ: NBIS) is trading at $214.99, down 3% in morning trading, extending a brutal stretch that has seen the stock fall 11% over the past week.
The decline comes despite Rosenblatt Securities initiating coverage of Nebius with a Buy rating last Friday, placing the company near the top of the neocloud group alongside rival CoreWeave.
CoreWeave (NASDAQ: CRWV) is trading at $80.91, down 1%, a shallower drop for the larger neocloud competitor that recently joined the NASDAQ 100 index.
Both companies rent accelerator capacity to AI developers by the hour, a shared business model that groups them together under the neocloud category and exposes them to similar market pressures.
Last week’s pressure traces to a disputed report on OpenAI’s revenue run-rate, which drove a broad selloff across AI infrastructure and neocloud names throughout the sector.
Nebius has not issued any new company-specific announcement since that selloff began, meaning the continued leg lower lacks a fresh corporate catalyst to explain it.
The wider cloud software market is showing mixed signals, with the WisdomTree Cloud Computing Fund (NASDAQ: WCLD) up 0.4% to $43.90, while the Invesco QQQ Trust (NASDAQ: QQQ) slips 0.1% to $750.43.
Nebius commits significant capital to purchasing accelerators well ahead of the revenue they generate, with remaining performance obligations reaching $37.5 billion, providing multi-year revenue visibility at the cost of heavy upfront spending.
Recent results show the company’s rental engine is scaling, with Q2 2026 revenue of $582.3 million, of which $574.9 million came from the Nebius AI Cloud segment alone.
Management reaffirmed its full-year 2026 revenue outlook of $3 billion to $3.4 billion and raised its contracted power guidance to more than 4 gigawatts by year-end, signaling continued confidence in long-term growth targets.
The bull case rests on longer-term targets that include annual recurring revenue of $7 billion to $9 billion alongside a 40% adjusted EBITDA margin, a profitability path that depends on signed capacity being fully utilized.
Nebius carries a forward price-to-earnings ratio of 46x, a valuation that requires sustained execution against those targets to justify at current prices, even after the recent pullback.
CoreWeave illustrates the financial strain the neocloud model can carry even at scale, posting Q2 2026 capital expenditures of $6.42 billion that left free cash flow at negative $5.74 billion, despite a revenue backlog of $104 billion and adjusted EBITDA of $1.51 billion.
Heavy dependence on capital markets remains a key vulnerability for both Nebius and CoreWeave, a structural risk that last week’s AI-driven selloff brought into sharper focus for investors watching the sector.
Nebius is currently trading below its 50-day moving average of $224.42, meaning the stock has meaningful technical ground to recover before its chart can be considered constructive again.
