NEW YORK, July 29, 2026, 12:58 p.m. EDT – Nebius NASDAQ:NBIS stock slid 10% as the company’s asset-light approach came under pressure from funding requirements, prompting investor caution.
Nebius stock dropped 9.9% to $152.97 by midday Wednesday, according to delayed data. U.S. markets stayed open. The company previously scheduled its second-quarter results for August 12.
The decline extended across multiple stocks. CoreWeave NASDAQ:CRWV slipped 8.5%, IREN NASDAQ:IREN decreased 10.6%, and Nvidia NASDAQ:NVDA was off 2.8%. At 11:39 a.m. EDT, the Nasdaq was lower by 1.1%.
The market is focusing on a single issue. Can Nebius transfer a sufficient portion of its expansion expenses away from its balance sheet? Its cash expenditures far exceed existing revenue, even with robust client support.
Revenue for the first quarter totaled $399 million. The company spent $2.47 billion on property, equipment, and intangible assets, a figure 6.2 times higher than revenue, according to filings. Interest expense amounted to 16% of sales.
Customer cash eased that pressure. Advances from customer agreements reached $3.20 billion, amounting to 129% of cash capital expenditure in total. These advances resulted in positive operating cash flow of $2.26 billion.
The first-quarter results have not been audited. The ratios listed below are derived from company reports.
| Nebius funding measure | Q1 2026 | Investor comparison |
|---|---|---|
| Revenue | $399 million | Baseline |
| Cash capital spending | $2.473 billion | Represents 6.2 times revenue |
| Customer advances | $3.198 billion | Equal to 129% of cash capital spending |
| Interest expense | $63.7 million | Accounts for 16.0% of revenue |
Expenditures on property, equipment, and intangible assets.
The arrangement provides a time buffer, but not extra funds. As of March 31, deferred revenue totaled $4.78 billion. Outstanding performance commitments amounted to $33.59 billion. Nebius projected that 29% would be recognized as revenue within the next 24 months.
Nebius reported $9.30 billion in cash as of March 31. Principal from convertible notes totaled $10.04 billion. The amount heightens the importance of execution and refinancing.
Nvidia remains a key backer. The company’s July disclosure indicated a 9.3% beneficial interest, largely via a warrant. As of Wednesday’s postponed trade, Nebius was 61% higher compared to the $94.94 price seen in March.
The company’s approach is to pursue an asset-light expansion strategy. Partners provide the funding, ownership, and operation of the data centers and hardware, while Nebius delivers the architecture, software, and customer base.
Chief Executive Arkady Volozh stated that partners have the potential to access “a much wider customer base with much better margins.” The first deals feature revenue sharing, licensing fees, as well as committed-capacity arrangements. Nebius
Nebius arranged a $775 million facility secured by graphics processors and future contracted cash flows. The facility carries an interest rate 2.5 percentage points over SOFR, which is a key short-term funding rate in the United States. According to Nebius, the loan combined with customer cash flows fully covers the capital costs for that deployment.
A release on July 17 referenced over $40 billion in contracted revenue from investment-grade clients, such as Microsoft NASDAQ:MSFT and Meta Platforms NASDAQ:META. This amount should not be simply combined with March commitments, as the timing and criteria are not the same.
Credit conditions have deteriorated. According to Reuters, major technology firms sold $194 billion in bonds by July 7, a figure 79% higher than the total issued throughout 2025.
Colby Stilson, who leads fixed income at Brown Advisory, stated, “We’re already seeing fatigue within credit markets in supporting this massive debt issuance.” This year, the yields on most similar hyperscaler bonds have been higher. Reuters
August 12 marks the initial key test. Investors are expected to monitor metrics including capital expenditure, customer prepayments, secured loans, and asset-light income. Guidance on margins could prove more significant than any new contract announcement.
Risks: There is a possibility that partners might not fund or manage sites in line with Nebius expectations. Challenges such as customer attrition, competitive pricing, and more restrictive capital availability may put pressure on returns. Additionally, convertible notes pose a risk of dilution.
The benchmark is straightforward. Nebius needs growth driven by software to surpass its requirements for hardware funding. Until this happens, valuation will stay heavily linked to credit conditions.
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