On June 18, Nebius Group (NASDAQ:NBIS) stock ended the day at $286.69, a record. Right now, shares trade around $165 — about 40% lower. Most of that drop is recent, with the stock falling about 30% in October alone.
Sure, it’s still been a great year for anybody who bought the artificial intelligence (AI) cloud provider’s stock in January. Even after the slide, the stock has nearly doubled this year.
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But the stock arguably isn’t cheap enough yet. Nebius is calling for a sharp gain in revenue in the next two quarters, and I think the price already assumes it gets there.
Image source: The Motley Fool.
No company news explains the drop
Nebius itself hasn’t given investors much new to worry about. Its October announcements included a small software acquisition and a developer-training program. And the company hasn’t changed its forecast since it reaffirmed its 2026 guidance with its second-quarter report in August.
Instead, the selling looks broader. Fellow AI cloud provider CoreWeave has dropped about as much as Nebius in October, as investors seem to have soured on companies that rent out AI computing power. I can’t pin down a single reason.
Put another way, the price has changed far more than the business has over the last few weeks.
Can the second half deliver?
Nebius’ growth has been remarkable. Revenue climbed from around $228 million in the last three months of 2025 to $399 million in the first quarter of 2026, then $582 million in the second quarter, up 454% year over year. Compared to the previous quarter, growth slowed from 75% to 46%. But every quarter still added over $170 million in revenue. Annualized run-rate revenue (the last month of the quarter’s AI cloud revenue, times 12) rose from $1.9 billion in March to $3.0 billion in June.
Management, though, is calling for a much steeper climb. Nebius expects revenue of $3.0 billion to $3.4 billion for 2026, and year-end annualized run-rate revenue of $7 billion to $9 billion.
With $981 million of revenue in the first half, reaching even the bottom of that range means taking in around $2 billion in the second half, more than twice the first half’s total. Put differently, Nebius has to average about $1 billion a quarter, or about 75% more than it took in during the second quarter.
