BoFA identified delays in third-party data-center capacity activation as the third quarter’s central concern, according to TheFly.
- Baird cut its price target to $200 from $340 while retaining an ‘Outperform’ rating.
- BofA said Nebius’ full-year outlook implies a sequential slowdown in the fourth quarter.
- The firm lowered its target to $265 from $310 while maintaining a ‘Buy’ rating.
Nebius Group (NBIS) shares were down nearly 1.5% in Friday’s premarket trading, putting the AI cloud company’s stock on track for its sixth consecutive weekly loss amid disappointing guidance and renewed concerns about its data center expansion.
Baird analyst Rob Oliver said the data center delays introduce risk to Nebius’s story that did not exist previously, according to the note cited by Investing.com. The firm lowered its price target to $200 from $340 while maintaining an ‘Outperform’ rating.
Nebius’ inference product, Token Factory, remains one of the fastest-growing layers of AI infrastructure, the firm noted.
BofA Flags Capacity Delays, Q4 Slowdown
BofA said Nebius delivered a third-quarter earnings beat, but its full-year outlook implies a sequential slowdown in the fourth quarter.
The firm identified delays in third-party data-center capacity activation as the quarter’s central concern, with planned activations and associated revenue recognition shifting from late 2026 into early 2027.
BofA lowered its price target to $265 from $310, reflecting revised estimates and a lower valuation multiple to account for the delays, per TheFly.
Nebius Sees 2026 Revenue At Low End
Nebius reported third-quarter revenue of $980.8 million, up 571% year over year, beating the consensus estimate of $907.2 million, per Fiscal.ai data. However, $325 million of revenue came from non-recurring activity under the company’s asset-light model.
Nebius’ adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $465.8 million, compared with a $5.2 million loss a year earlier.
The neocloud company now expects 2026 revenue at the lower end of its previous $3 billion to $3.4 billion range after delays at third-party facilities. It also raised its capital expenditure forecast to approximately $27 billion from $20 billion to $25 billion.
For 2027, the company expects revenue between $12 billion and $13 billion and capital expenditures of $40 billion to $45 billion.
Nvidia Controversy Adds To Pressure
The selloff in NBIS stock in the previous session coincided with broader weakness in AI infrastructure stocks following Nvidia (NVDA) CEO Jensen Huang’s resignation after reports of multiple extramarital affairs, including a relationship with Alice Huang, suspected of spying for Beijing.
Nebius has significant ties to the chipmaker. Nvidia announced a $2 billion investment in Nebius in March, alongside a strategic partnership supporting the deployment of more than 5 gigawatts of Nvidia-powered infrastructure by the end of 2030.
What Retail Thinks About NBIS Stock
On Stocktwits, retail investors’ sentiment around NBIS stock remained ‘extremely bullish’ amid extremely high user message volume.
So far this year, NBIS stock has risen over 43%. In comparison, the Dan IVES Wedbush AI Revolution ETF (IVES) and the Roundhill Generative AI & Technology ETF (CHAT), which hold the stock, have risen over 12% and 20%, respectively, over the same period.
See Also: Nvidia CEO Jensen Huang’s Exit Raises AI Financing Risks, Says Ed Yardeni — Sees Selloff As Buying Opportunity
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