Nebius Group (NASDAQ:NBIS) saw its shares decline by 19.1% last week, despite the successful closure of its first senior secured loan totaling $775 million. The loan, which is collateralized by deployed graphics processing units (GPUs) and customer cash flow commitments, represents a significant financing milestone for the company.
Loan Details and Market Reaction
The floating-rate facility carries a margin of one-month SOFR plus 250 basis points and matures on October 31, 2030. In comparison, CoreWeave (NASDAQ:CRWV) recently secured a larger $8.5 billion GPU-backed tranche at SOFR plus 225 basis points, with a March 2032 maturity and an A3/A (low) rating. Nebius's loan does not carry a rating, but its debt-service coverage ratio of 1.15 times provides some credit protection.
The 25-basis-point spread difference between the two loans does not offer a straightforward credit comparison, yet lenders accepted Nebius's contracted assets at a rate close to CoreWeave's rated debt. This suggests confidence in Nebius's underlying cash flows, even as the company's stock suffered a sharp sell-off.
Capital Expenditure Plans
Nebius forecasts capital expenditures of $20 billion to $25 billion for 2026, with the $775 million loan representing just 3.1% to 3.9% of that total. The company stated that the facility and associated contract cash flows fully cover the funding requirements for this specific GPU deployment. However, the broader buildout will require additional financing, raising questions about the sustainability of the asset-light AI strategy.
Total funding tied to Nebius infrastructure reached $2.475 billion across two recent disclosures, including a $1.7 billion initiative announced on Thursday. That initiative, backed by Industrial Development Funding and Oaktree, targets energy needs through Bloom Energy (NYSE:BE) fuel cell deployments. Of this total, only $775 million constitutes direct debt taken on by Nebius.
Market Context
The broader neocloud sector also experienced declines, with CoreWeave falling 17.6% and IREN (NASDAQ:IREN) losing 18.3%. The Nasdaq Composite slipped 2.9% amid a broader AI-driven sell-off that began with chipmakers. “It’s like the market has chip fatigue,” said Carson Group strategist Ryan Detrick.
Nebius finished Friday at $177.71, up 3.46% on the session but well below the prior week's close of $219.65. Trading volume reached 24.91 million shares, 1.4 times the stock's average turnover.
Financial Position
As of March 31, Nebius reported cash holdings of $9.30 billion prior to the new loan, with non-current debt of $8.43 billion. First-quarter capital expenditures on equipment and intangibles totaled $2.47 billion, while revenue came in at $399 million. The company reported substantial oversubscription for the facility, which Chief Operating Officer Ophir Nave called “an important step in that strategy.”
Investors are now seeking confirmation that this financing model can be replicated across Nebius's extensive contract portfolio, which includes more than $40 billion in additional contracted revenue from customers such as Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META). Nebius confirmed that the latest capacity tranche for Microsoft has been delivered.
Risks and Outlook
The loan's floating interest rate and 1.15-times coverage covenant introduce risks, and Nebius has highlighted potential challenges related to financing, power availability, supply chains, demand, and technology. With Alphabet (NASDAQ:GOOGL) set to report earnings on Wednesday, its AI investment forecast could influence neocloud stock performance. U.S. financial markets were closed Sunday, with normal Nasdaq trading resuming Monday at 9:30 a.m. EDT.
