Baird Cuts Nebius Group Target Price on Data Center Delays

Baird lowered its price target for Nebius Group from $340 to $200, citing data center construction delays, while maintaining an "Outperform" rating. The stock trades at $128.64, down sharply from its 52-week high of $299.86 but still up 54% year-to-date. The delays, including at the Vineland facility, drove the company's downward revision to annual recurring revenue guidance. Nebius reported $325 million in non-recurring revenue from its asset-light model, beating third-quarter expectations, with improvements in pricing, demand, and payback periods. Baird noted the delays introduce new risks, as power-on timing is critical to operations, though it kept the rating due to the stock's decline and conservative 2027 outlook. Third-quarter revenue surged 571% year-over-year to $980.8 million, but adjusted losses of $10.84 per share far exceeded analyst estimates of $0.63, raising concerns about aggressive spending.