Nebius Drops 13% as Baird and BofA Cut Targets Over Data Center Delays

Nebius Group (NASDAQ:NBIS) stock fell 13% to $111.34 in morning trading on November 13, after Baird and Bank of America both slashed their price targets over delays in activating third-party data center capacity. The drop compounds a brutal month for the AI cloud company: Nebius shares are now down 46% over the past four weeks.

Two Wall Street firms reset their expectations on the same day. The cuts came one day after Nebius reported its Q3 2026 results on November 12, a report that paired a revenue beat with a trimmed 2026 outlook and a bigger spending plan. The combination rattled investors who had bought into the company's rapid expansion story.

What did the analysts actually change?

Baird analyst Rob Oliver lowered his price target on Nebius to $200 from $340, while keeping an Outperform rating. That is a 41% reduction in one move. According to Oliver, the delays introduce risk to the Nebius story that didn't exist before.

BofA made a smaller but still sharp cut. The firm reduced its Nebius target to $265 from $310 and kept its Buy rating. In BofA's view, the full-year outlook implies a sequential fourth-quarter slowdown, with planned launches and related revenue shifting from late 2026 into early 2027.

Both firms kept positive ratings. Neither was willing to call the story broken. But the size of the reductions, particularly Baird's $140 cut, signals how much of Nebius's valuation rested on capacity arriving on schedule.

What did Nebius report?

The numbers behind the selloff tell a more complicated story than the stock chart suggests. Nebius posted third-quarter revenue of $980.8 million, topping the $907.2 million consensus estimate. That looks like a clean beat. It wasn't.

The company disclosed that $325 million of that total came from non-recurring activity tied to the initial phase of an asset-light partnership. Strip that item out, and revenue would have landed below consensus. The market read the beat as lower quality than the headline suggested.

Guidance was the bigger problem. Management said Nebius now expects 2026 revenue at the low end of its prior $3 billion to $3.4 billion range, because third-party colocation deliveries slipped. New Jersey phases have been pushed to Q2 2027.

At the same time, the company raised its 2026 capital expenditure forecast to approximately $27 billion. More spending, less near-term revenue. That combination rarely sits well with investors, and this time was no exception.

Nebius's chief financial officer pushed back on the bearish framing on the earnings call. "The changes in our 2026 guidance are just about timing, not demand," the CFO stated.

Why are CoreWeave and NVIDIA falling too?

The selloff did not stay contained to Nebius. A broad neocloud selloff spread through the sector on November 13.

CoreWeave (NASDAQ:CRWV) stock dropped 11% to $50.49. The decline is notable because CoreWeave's fundamentals point the other way: the AI cloud provider raised its full-year revenue guidance when it reported on November 10. Investors sold it anyway.

NVIDIA (NASDAQ:NVDA) fell 4% to $159.49. The chipmaker sits upstream of both cloud providers, supplying the chips and systems, including its Vera Rubin platform, that Nebius and CoreWeave deploy. NVIDIA is also a Nebius investor and partner, so it absorbs some direct impact from Nebius's troubles.

NVIDIA has an additional problem of its own making. Jensen Huang resigned as CEO on November 12, and the company has no permanent replacement. Among the three names, NVIDIA posts the smallest decline, and the company's main concern is its own leadership change rather than the neocloud rout.

How do these three business models differ?

The three companies occupy different layers of the same AI infrastructure stack, which explains why they move together.

Nebius runs a full-stack AI cloud. It owns data centers in Finland, Missouri and Alabama, and leases colocation space in the U.S., Europe, Israel and India. Through its Token Factory business it sells managed inference. It also owns side businesses, including the Avride robotaxi and delivery-robot unit and the TripleTen education platform. The colocation layer is where the current delays sit.

CoreWeave operates as a pure-play GPU cloud. It funds its expansion largely through debt facilities matched to customer contracts, convertible notes and customer prepayments.

NVIDIA sits at the top of the chain, supplying the silicon both cloud providers run.

All three depend on the same physical expansion cycle. Power availability and construction timelines can slow revenue even when demand holds up. That is precisely what is happening to Nebius now: the CFO insists demand is intact, but concrete and electricity are not moving as fast as contracts.

What is the bull case from here?

Nebius's next test is whether its delayed third-party capacity comes online in early 2027 as expected. CEO Arkady Volozh was direct on the call. "None of that capacity is canceled," he said. He added that the company's own sites remain "on track and even ahead of schedule."

The company's initial 2027 outlook calls for revenue of $12 billion to $13 billion. That is roughly four times the top of the 2026 range, so the growth story depends heavily on the delayed capacity arriving.

Bullish investors can also point to Volozh's statement that "Prepayments on Q3 agreements covered more than 100% of the associated capex." That is an unusually strong funding position for a capital-intensive business.

The bears have their own ammunition. Nebius is lifting its spending while pushing revenue out, leaving the company more reliant on prepayments, convertible notes and asset-backed financing. If the AI demand cycle softens, that funding stack becomes a risk rather than a feature.

What comes next?

The New Jersey capacity timeline is the strongest signal investors should watch. Further delays at third-party sites could add pressure on Nebius and prolong the sector-wide selloff. On-time deliveries could ease the concerns behind the analyst cuts and restore confidence in the 2027 revenue target.

For the broader market, the episode is a reminder that the AI infrastructure buildout remains a physical-economy story. Chips, capital and contracts can align perfectly, and a construction schedule can still move a multibillion-dollar revenue forecast by two quarters.