Shares of Nebius Group (NASDAQ:NBIS) edged higher in premarket trading on Friday, recouping a fraction of the losses suffered a day earlier when a critical local planning decision failed to materialize. The stock was up 3.5% at $196.49 as of 08:08 EDT, recovering roughly 23% of Thursday's $29.11 decline.
The sharp selloff on Thursday, which saw shares tumble 13.3% to close at $189.88, erased approximately $7.4 billion in market value based on the company's outstanding share count of 253.9 million as of March 31. The drop came after a six-hour Vineland planning board meeting concluded without a decision on the second phase of Nebius's data center project and its associated on-site power plan.
While construction on the first phase has already begun following prior approval, the unresolved second phase represents a potential timeline risk rather than an immediate financing shortfall. This distinction is important for investors, as the company has already secured significant funding commitments but still requires local authorization to proceed.
Deal advisors revealed $1.7 billion in project funding for Bloom Energy Corp. (NYSE:BE) fuel cells, which will support behind-the-meter power associated with Nebius's capacity contract. However, even this finalized financing has yet to receive the necessary local approvals, underscoring the regulatory hurdles that remain.
The magnitude of Thursday's decline was notable compared with peers in the AI infrastructure space. While Nebius fell 13.3%, CoreWeave (NASDAQ:CRWV) dropped 5.1%, IREN (NASDAQ:IREN) slipped 2.5%, and Applied Digital (NASDAQ:APLD) declined 3.4%. The S&P 500 edged down just 0.2%, while the tech-heavy index rose 0.6%. This suggests the selling was company-specific rather than part of a broader neocloud downturn.
Investor concerns are rooted in the project's strategic importance. Nebius has a $17.4 billion deal with Microsoft Corp. (NASDAQ:MSFT) that depends on the Vineland facility, making the first phase critical beyond just a single local site. The company's 2026 revenue guidance of $3.0–$3.4 billion implies that the $7.4 billion loss represents roughly 2.3 times the midpoint of that range, highlighting the market's sensitivity to execution risks.
During the planning hearing, local residents raised concerns about water usage, emissions, and operational impacts. Testimony estimated annual water consumption at nearly 8 million gallons and carbon emissions at 2.19 billion pounds. However, Michael Fralinger, a lawyer for the project, emphasized that no subsidies from current utility customers would be involved, stating, "All of the financial risk for this project is being borne by the project."
Wall Street remains cautiously optimistic, with a consensus rating of Overweight and price targets ranging from $144 to $410, averaging $267.31—implying a potential upside of about 41% from Thursday's close. Citigroup (NYSE:C) maintained its Buy rating on Wednesday, though analyst Tyler Radke trimmed the price target to $278 from $287.
Nebius is scheduled to release its second-quarter results before the market opens on August 12. Analysts currently expect a per-share loss of $0.72, a slight deterioration from the $0.56 estimate a month ago, reflecting increased attention on capacity timing and margin performance. The company's Q1 results showed revenue of $399 million, up from $50.9 million a year earlier, with adjusted EBITDA of $129.5 million versus a $53.7 million loss in the prior-year period.
CEO Arkady Volozh has previously noted that demand continues to outpace supply, stating in May, "We typically see several customers competing for every GPU we bring online." With capital expenditures projected at $20–$25 billion for 2026, any delays in the Vineland project could impact cash flow and contractual obligations. The Vineland planning board is required to meet again, and investors will be watching closely for a resolution.
