Nebius Stock: Depreciation Outruns Operating Profit as Microsoft Tightens the Reins
Published on 11/06/2026 at 06:20 | Editorial boerse-global.de
Nebius is discovering that demand is the easy part. The AI cloud builder can point to a revenue base that grew 454% year over year to $582.3 million in the second quarter of 2026, yet the company remained unprofitable — and a closer look at the earnings math shows why. Adjusted operating profit before interest, taxes and depreciation came to roughly $236 million, against depreciation of just under $260 million. The infrastructure is consuming more value than it currently generates.
That gap gave investors a reason to reassess on Wednesday, when the shares fell 15% in a single session. The move sharpened two questions that had been building separately: whether Nebius can turn its expansion into an economically durable business, and whether its data-center projects are being delivered on time and on budget.
Microsoft Moves From Customer to Inspector
The second question acquired fresh urgency this week. Bloomberg reported that Microsoft is tightening its oversight of data-center projects involving Nebius, citing construction delays, permitting problems and high costs. Microsoft staff inspected the New Jersey site in person.
The scrutiny cuts both ways. Tighter controls can catch problems early, before they compound. They can also expose that delivery will require more time or more money — a distinction that matters enormously for a company whose growth story rests on execution. For shareholders, a concrete account of countermeasures would carry more weight than a general expression of confidence. Which difficulties can be solved organizationally, and which demand additional work? The number of announced measures matters less than their verifiable effect on delivery.
Should investors sell immediately? Or is it worth buying Nebius?
Concentration adds to the pressure. Three customers accounted for 59% of quarterly revenue, so a significant share of the business depends on a narrow base of buyers. Bloomberg also reported that Microsoft is reconsidering new deals with neocloud providers — a shift that, if it translates into more cautious awarding of contracts, could complicate Nebius's path to further agreements.
The Contract Book Cuts Both Ways
None of this erases the scale of what Nebius has already signed. The company disclosed four AI cloud contracts each worth an average of more than $1 billion. Its agreement with Microsoft carries a value of $17.4 billion and could reach as much as $19.4 billion. Those figures make the build-out understandable; they do not make it cheap.
Execution quality now matters more than the next headline contract. The expansion has to match customer demand and produce infrastructure that is operational on schedule. Large orders strengthen the growth outlook while raising the bar for delivery — and with a concentrated customer base, that test lands harder.
A Capital Bill That Sets the Bar
The financing picture demands discipline of its own. Capital expenditure of $29.1 billion and net debt of roughly $34 billion are forecast for the end of 2027. Against that backdrop, a cautious valuation framework seems warranted while the build-out ties up substantial resources and sustainable earning power has yet to materialize.
The opportunity sits in the large customer contracts and the rapid revenue growth. The counterweight is the sheer volume of capital those opportunities absorb. Depreciation deserves particular attention because it captures the wear on infrastructure already built — anyone assessing Nebius should look past adjusted EBITDA, which is a useful gauge of operating progress but not proof that returns cover the capital employed.
Nebius at a turning point? This analysis reveals what investors need to know now.
Citi Trims Its Target, Keeps Its Rating
Analysts are recalibrating rather than retreating. Citigroup's Tyler Radke cut his price target to $265 from $324 on Wednesday, according to media reports, while keeping his buy recommendation. The combination captures the tension of the moment: reduced expectations, intact conviction. For the bullish case to hold, operational progress will have to carry that positive rating.
The next hard data point arrives on November 12, when Nebius reports third-quarter 2026 results before the market opens. Analysts expect revenue of around $906 million. The call, scheduled for 8:00 a.m. Eastern Time, offers a concrete venue for detail on the project difficulties — and for evidence of progress on permitting and construction. Whether management provides that detail is an open question; the date itself is confirmed by the company.
How those revenues are framed will matter at least as much as the top-line figure. Profitability trends and the financing of further expansion are the metrics to watch. If Nebius can show traceable progress on the ground, tighter Microsoft oversight could prove stabilizing rather than damaging. If the reported difficulties harden instead, execution risk will increasingly set the valuation. Until the numbers land, the depreciation line and the expected capital needs argue for more caution than revenue growth alone can justify.
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Nebius Stock: New Analysis - 6 November
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