Nebius Q3 Revenue Surges 571% but 2027 Capex Plan Spurs 19% Share Drop

Nebius Group reported third-quarter revenue of $981 million, up 571%, but its 2027 revenue guidance of $12 billion-$13 billion disappointed investors, and its planned $40 billion-$45 billion in 2027 capital expenditures exceeded consensus by 52%. Shares fell about 19% on Nov. 12. Customer prepayments covered 100% of third-quarter contracts, with Nebius expecting $17 billion-$20 billion in 2027 prepayments to fund 40%-50% of capex, plus 25%-45% from debt. However, these prepayments represent future computing services owed, creating a working capital drag as deferred revenue unwinds. Morningstar maintains a $150 fair value estimate with a no-moat rating and Very High uncertainty. Management acknowledged Nebius is a price-taker in GPU renting, a commodity business that thrives only while capacity remains scarce, contrasting with Amazon's long-term platform strategy.