Nebius $19.4bn Microsoft Deal Slips: Shares Plunge, Targets Cut
Nebius says its $19.4 billion Microsoft contract is slipping at a New Jersey site, cutting its 2026 forecast as brokers slash price targets and shares fall.
Image: Wikimedia Commons / Coolcaesar
NEW YORK, Nov 15 — Nebius Group has told investors that its contract with Microsoft, worth up to $19.4 billion, is slipping behind schedule at a data centre in Vineland, New Jersey, after the site’s operator fell months behind on delivery, the company said on its third-quarter earnings call on Thursday.
Only just over half of the contracted capacity is now due by the end of this year, with the rest pushed into the second quarter of 2027. The original window covered 2025 and 2026, and the contract carries financial penalties for late delivery.
Key Takeaways
- Just over half of the Microsoft capacity at Vineland, New Jersey arrives by end-2026; the rest is due in Q2 2027.
- Nebius cut 2026 revenue guidance to $3bn-$3.2bn, from $3bn-$3.4bn, blaming third-party delays.
- Shares fell 9.92 percent Friday to $115.88, a day after a 16.84 percent drop, as brokers slashed targets.
- Nebius still plans $40bn-$45bn of AI spending in 2027 and revenue of $12bn-$13bn.
Why Is the Nebius Microsoft Contract Delayed in New Jersey?
The Vineland site is run by DataOne, a third-party operator. Nebius chief product and infrastructure officer Andrey Korolenko told investors the delay followed DataOne’s decision to wind down temporary power generation sooner than expected as the facility switches to Bloom Energy fuel cells. The site has been troubled for months: in August, Floodlight found at least 45 natural gas generators running there without permits, and New Jersey regulators later fined the facility $1.1 million.
Microsoft can terminate the affected services after a grace period if dates are missed and no alternative capacity is offered. Nebius said Microsoft “has been part of the planning process,” but did not say whether it has accepted the new dates.
How Much Has Nebius Stock Fallen After the Microsoft Delay?
Shares closed down 16.84 percent on Thursday at $128.64, then fell a further 9.92 percent on Friday to $115.88. Baird cut its target to $200, DA Davidson to $125, and Truist to $245. CoreWeave fell 6.13 percent to $53.13 and Nvidia fell 2 percent, taking its value below $4 trillion.
| Measure | Figure | Change |
|---|---|---|
| Q3 revenue | $980.8m | Up 571% YoY |
| Q3 adjusted EBITDA | $465.8m | From $5.2m loss |
| 2026 revenue guidance | $3bn–$3.2bn | Cut from $3bn–$3.4bn |
| Microsoft contract | Up to $19.4bn | Capacity due Q2 2027 |
| Share price, Friday | $115.88 | Down 9.92% |
| 2027 capital spending | $40bn–$45bn | First 2027 guidance |
The sell-off was driven by guidance, not the quarter: revenue rose 571 percent to $980.8 million, and the net loss narrowed to $37.5 million.
What Is Nebius Spending on AI Infrastructure in 2027?
Nebius plans to spend $40 billion to $45 billion building AI infrastructure in 2027, far more than Wall Street expected, funded largely by customer prepayments and secured loans. Chief executive Arkady Volozh said “the demand for AI is real and massive,” and the company expects revenue to roughly quadruple to $12 billion to $13 billion.
The plan tests the neocloud model, in which smaller providers borrow against big contracts to build data centres fast. That model is under strain: the Federal Reserve has flagged AI as a leading risk to financial stability, and banks have grown wary of lending into the AI debt market. The Vineland delay shows the other risk: a contract worth billions can still slip because a third-party site is not ready. CoreWeave, the largest neocloud peer, faces similar questions.
Frequently Asked Questions
Is the Nebius Microsoft contract cancelled?
No. Microsoft has not publicly cancelled it, and Nebius said Microsoft has been part of planning the revised dates. The contract allows Microsoft to end affected services after a grace period if dates are missed.
How much is the Nebius Microsoft contract worth?
Up to $19.4 billion. Just over half of the Vineland capacity is due by end-2026, the rest in Q2 2027.
Why did Nebius stock fall in November 2026?
Shares fell after Nebius disclosed the delay and narrowed 2026 guidance to $3 billion to $3.2 billion on its November 12 call. The stock dropped 16.84 percent on Thursday and 9.92 percent on Friday.
How much will Nebius spend on AI infrastructure in 2027?
Nebius plans to spend $40bn-$45bn in 2027, funded by customer prepayments and secured loans. It expects revenue of $12bn-$13bn.
Fourth-quarter results early next year will bring a Vineland update. Microsoft has not yet said whether it has accepted the revised dates. Full results are on Nebius’s investor relations hub.
