Nebius Delays Delivery of Microsoft Capacity in New Jersey, Shares Fall 12.1% in Friday Session
Key Facts
Nebius shares fell 12.1% on Friday, November 13, as AI stocks declined amid renewed funding concerns and volatility linked to Nvidia, Reuters reported. The drop came after the company disclosed a revised schedule for delivering the capacity contracted with Microsoft at its New Jersey site. Nebius said it expects to deliver more than half of the capacity by year-end, with the remaining tranches to be delivered in the second quarter of 2027. The company tied the schedule reset to site partner DataOne beginning to scale back some temporary power generation ahead of the transition to permanent power. The delay puts the timing of capacity coming online at the forefront of the company’s operational challenges as it continues to expand its AI-related computing business.
Nebius said DataOne had begun withdrawing some temporary generation at the site ahead of the transition to a permanent power source, reshuffling the delivery dates for the remaining tranches. The company said in its shareholder letter that the decision "reset the timeline for the remaining tranches." Nebius is transitioning the power source at its New Jersey site to fuel cells from Bloom Energy. It added that the initial generation units had been installed and that the company was working to increase available capacity. According to the announced schedule, delivery progress depends on completing this stage of the transition and providing the capacity needed at the site.
The schedule revision comes as third-quarter results showed rapid business growth, with revenue reaching $980.8 million, up 571% from $146.1 million in the same period a year earlier. The company also reported adjusted earnings before interest, taxes, depreciation and amortization of $465.8 million, compared with an adjusted loss of $5.2 million a year earlier. Annualized run-rate revenue stood at $6.4 billion at the end of September, up 1,062% year over year and 113% from the end of June. Nebius said customers had committed to contracts worth more than $12 billion since the start of the third quarter. Upfront payments on third-quarter deals covered more than 100% of the associated capital expenditures, compared with 50% to 60% in the second quarter.
The company also revised the timing for reaching $7 billion in annualized run-rate revenue, saying it now expects to exceed that level in February, rather than December as previously forecast, a delay of about two months. In contrast, it raised its 2026 capital expenditure estimate to about $27 billion, above the previous range of $20 billion to $25 billion, saying the additional spending is intended to provide capacity for 2027, particularly at company-owned sites. In its preliminary outlook for 2027, Nebius forecast revenue of $12 billion to $13 billion, with pretax break-even in the fourth quarter of that year. It also said it expects to bring more than 1 gigawatt of new capacity online each year. The company’s project page said the Vineland AI factory is expected to become operational by 2027, using Bloom Energy fuel cells to power the site.