NBIS Stock: What's the Real Story?

The Billion-Dollar Paradox: Why Nebius Took a Nosedive Despite the Meta Deal

When a company announces a fresh $3 billion, five-year AI infrastructure supply agreement with a titan like Meta Platforms, you’d expect champagne corks to be popping, not stock prices to be plummeting. Yet, that’s precisely what happened to Nebius Group N.V. (NASDAQ:NBIS) on Tuesday, November 11, 2025. The Dutch artificial intelligence infrastructure firm watched its stock shed 7.03% of its value. This wasn't just a ripple; it was a significant dip on what, by all accounts, should have been a triumphant day.

On paper, Nebius is riding the crest of the AI wave. This Meta deal isn't even their first rodeo; it follows a colossal $17.4 billion agreement inked with Microsoft (MSFT) just two months prior in September. These aren't small-time partnerships; they're foundational deals with the absolute biggest players in tech, validating Nebius's position in the fiercely competitive AI cloud sector. Nebius Founder and CEO Arkady Volozh even boasted that demand for capacity exceeded available supply for the Meta contract, a classic sign of a hot commodity. The company's ambition is equally eye-popping: an annualized run-rate revenue target of $7 billion to $9 billion by the end of 2026. The narrative is clear: Nebius is building, expanding, and securing its future in a rapidly accelerating market.

The Headline vs. The Hard Truth

But here’s where the numbers tell a different story, the one the market heard louder than the press release. While revenue did surge an impressive 355% year-over-year in the third quarter—to be more exact, $146.1 million—it still missed analysts' expectations of $155.7 million. A miss is a miss, especially for a growth stock priced for perfection. And this is where, frankly, I start to get a little antsy. The real kicker? The company's adjusted net loss widened significantly, ballooning to $100.4 million from $39.7 million in the prior-year period.

Think of it like this: Nebius is constructing a massive, state-of-the-art AI data center. They've secured two huge tenants—Microsoft and Meta—who are practically begging for space. They’re pouring concrete, wiring fiber, and installing racks at an incredible pace, and everyone agrees the future demand for these facilities is insatiable. But with every new beam they hoist, with every server they power up, their construction costs are spiraling faster than their immediate rental income. The market, in its cold, calculating wisdom, seems to be asking: "Are you building a gold mine, or just digging a very expensive hole?"

Beneath the Billions: A Deeper Dive

Analysts, bless their optimistic hearts, continue to frame these partnerships as strengthening Nebius's position. And they're not wrong, from a strategic standpoint. Securing Meta and Microsoft isn't just about revenue; it's about credibility, scale, and future leverage. The capacity for the Meta contract is slated to be deployed over the next three months, meaning revenue from that deal is still largely on the horizon, not yet in the bank. This is a common pattern in high-growth infrastructure plays: massive upfront investment, followed by a delayed revenue ramp-up.

However, the market isn't just buying the vision; it’s scrutinizing the balance sheet. GuruFocus, a platform I often check for a quick sanity test, detected three distinct warning signs for NBIS. While they don't spell out the specifics, these are usually red flags related to financial health, valuation, or operational efficiency. When you combine a revenue miss, widening losses, and external warning signals, it paints a picture of a company facing significant execution risk, even amidst unprecedented demand. It suggests that the market is worried about Nebius's ability to translate monumental deals into sustainable, profitable growth. Is the cost of acquiring and delivering on these massive contracts outweighing the immediate financial benefit? That’s the multi-billion dollar question, and on Tuesday, investors clearly leaned towards "yes."

When Growth Costs Too Much

The stock's reaction wasn't just a blip; it was a clear signal that the market views Nebius's current trajectory as a high-stakes gamble. While the long-term potential of AI infrastructure is undeniable, the path to profitability for companies like Nebius is proving to be incredibly capital-intensive and fraught with challenges. The market isn't just looking at the size of the deals; it's looking at the cost structure, the burn rate, and the timeline to cash flow positivity. For Nebius, Tuesday was a stark reminder that even in the most exciting sectors, the fundamentals eventually catch up to the hype.