Nebius Falls 14% as Spending Plans Swell to $27 Billion

Nebius Group (NASDAQ:NBIS) stock dropped 14% to $133.67 in morning trading on November 12, one day after a 15% gain, as the AI cloud company paired a softer 2026 outlook with a much bigger spending plan. The selloff didn't stay contained. CoreWeave (NASDAQ:CRWV) fell 10% to $54.57, IREN (NASDAQ:IREN) lost 7% to $19.41, and Applied Digital (NASDAQ:APLD) also traded lower. Every stock in the so-called neocloud group moved down after the Nebius report.

The paradox at the center of this story is simple: Nebius just beat earnings estimates and the market punished it anyway. That tells you what investors are actually watching now — not last quarter's revenue, but the price of building AI capacity and how fast that spending turns into profit. The whole sector is being repriced through that lens.

What did Nebius actually report?

On November 12, Nebius reported Q3 2026 revenue of $980.8 million, beating the LSEG consensus estimate of $907.5 million. Sales rose 571% from a year earlier, and the company posted a loss of 13 cents per share. By almost any growth measure, that's a strong quarter.

The problem came in the outlook. In his shareholder letter, CEO Arkady Volozh said Nebius expects 2026 revenue at the low end of its $3 billion to $3.4 billion range. Capital spending moved the opposite direction: Nebius raised its 2026 capex forecast to $27 billion, up from prior guidance of $20 billion to $25 billion.

The company also set its first 2027 numbers:

• 2027 revenue outlook: $12 billion to $13 billion
• 2027 capital expenditures: $40 billion to $45 billion, well above the FactSet estimate of $28.77 billion

Nebius described its 2027 view as "a conservative approach to the pace of our build-out." Investors read it differently. The mix of heavier spending and measured revenue growth has the market questioning how much these companies need to spend to build AI capacity — and whether the returns will arrive fast enough.

In plain terms: the beat didn't matter, the bill did.

Why did the pressure start a day earlier?

The group was already wobbling before Nebius reported. On November 11, reports emerged that the board of NVIDIA (NASDAQ:NVDA) is preparing to oust CEO Jensen Huang. That matters to the neoclouds because NVIDIA isn't just their main chip supplier — it's also an investor and a financial backstop for their projects.

According to a regulatory filing, NVIDIA held Nebius shares worth about $329 million at the end of June. NVIDIA is also a major investor in CoreWeave. Leadership turmoil at the company that supplies the GPUs and, in part, the money makes every neocloud balance sheet look riskier. That uncertainty added volatility across the group on top of the Nebius-driven selloff.

What happened to CoreWeave?

CoreWeave's decline is giving back much of its November 11 rally, and the context makes the reversal sharper. On November 10, CoreWeave reported Q3 2026 revenue of $3.66 billion, up 168% year over year, and lifted its 2026 revenue outlook to $13 billion to $13.3 billion. Its backlog stands at approximately $132.5 billion — a number that would normally anchor a stock, not sink it.

Bloomberg reported late on November 11 that CoreWeave plans to raise at least $4 billion through an investment-grade loan. New debt, however cheap, feeds the same question investors are asking Nebius: how much leverage sits behind these build-outs?

There's a wrinkle in the comparison. CoreWeave's November 11 rally was the bigger of the two stocks' gains, yet its drop on November 12 is smaller than Nebius's 14% fall. The market is punishing guidance and capex surprises, not raw growth rates.

Where does IREN fit?

IREN fell the least of the group, down 7% to $19.41, tracking the sector lower. The company gave investors a fresh milestone on November 5, disclosing that more than $4 billion of operating annual recurring revenue is now targeted for January, with a possible extension to the end of February.

Applied Digital also traded lower after rallying on November 11, completing the pattern: every neocloud stock that gained on sector momentum gave some of it back once Nebius reset expectations.

How do these four companies actually differ?

The group gets lumped together, but the business models diverge in ways that explain the different reactions.

• Nebius runs a full-stack AI cloud. It owns and operates data centers across Europe, the U.S. and the Middle East, selling compute and software on top. Its newer asset-light model lets partners finance and build facilities while Nebius supplies the platform and the customer demand.
• CoreWeave operates a larger GPU cloud with heavier leverage, funding much of its build-out through debt tied to specific customer contracts.
• IREN controls its own land, power and data centers, and is shifting from digital-asset mining to AI cloud work. Owning the infrastructure lets it slow construction when financing tightens.
• Applied Digital acts more like a landlord, signing long-duration leases with hyperscale customers instead of renting out GPUs.

The takeaway: four companies, four balance-sheet structures, one shared dependency on AI demand — and on NVIDIA.

What does Nebius need to prove now?

Nebius's next test is whether its 2027 revenue growth can justify a capital budget that keeps getting bigger. Bulls have real material to work with. On the August 12 earnings call, Volozh said Nebius "could sell today our entire 2027 capacity on these terms if we wanted to." If demand genuinely outruns supply, a $40 billion-plus capex plan is a growth engine, not a cash bonfire.

The bear case rests on three pressures. Spending keeps rising. The company depends on NVIDIA, a supplier now facing its own leadership turmoil. And dozens of ballot measures restricting data center development were backed by U.S. voters in recent elections, which could complicate the build-out pipeline at exactly the wrong moment.

CoreWeave and IREN face the same core question about how fast spending turns into profit, and NVIDIA's boardroom drama adds volatility across the entire group. Watch how the market's verdict on Nebius's spending settles — it will set the price of money for every company racing to build AI capacity.