Nebius Group (NBIS) stock fell Friday, extending Thursday's nearly 17% sell-off as investors weighed a weaker 2026 revenue forecast and data center delays.

NVIDIA Corp. (NVDA) CEO Jensen Huang's resignation and a wider loss at rival Nscale also pressured neocloud stocks.

However, Rosenblatt Securities analyst John McPeake remains bullish on Nebius despite the near-term challenges.

Rosenblatt Sees Strong Growth Despite Delays

On Thursday, McPeake maintained a Buy rating and a $304 price forecast on Nebius.

The analyst said Nebius exceeded all major third-quarter performance expectations.

Revenue grew more than sixfold year over year, beating his forecast by 7%. EBITDA, or earnings before interest, taxes, depreciation and amortization, topped his estimate by 57%.

However, Nebius lowered its 2026 revenue forecast due to delays at its Vineland, New Jersey, data center.

McPeake called the Vineland delay a "slight blemish" on an otherwise strong third quarter and outlook. He expects the disruption to be temporary and maintained his bullish stance on Nebius.

Microsoft Data Center Delay Seen As Temporary

The 300-megawatt Vineland facility is largely booked by Microsoft Corp. (MSFT) under a $17.4 billion agreement running through 2031.

McPeake said site landlord DataOne shut down temporary diesel power operations earlier than expected, delaying the facility's rollout. Nebius expects the site to become operational in 2027.

McPeake considers the delay temporary. He also believes strong AI demand could allow Nebius to secure higher prices if Microsoft canceled its agreement.

Customer Prepayments Support Expansion

Customer prepayments covered all of Nebius' third-quarter capital expenditures.

For 2027, Nebius expects prepayments and asset-backed financing to fund 75% to 85% of capital spending.

The company also has more than $40 billion in investment-grade contract revenue that could support additional financing.

Nebius Plans up to $50 Billion in Spending

Nebius raised the midpoint of its 2026 capital spending forecast by 20% to support more than 1 gigawatt of new capacity.

The company expects 2027 capital expenditures of $40 billion to $50 billion, above McPeake's $30 billion estimate and Wall Street's $28 billion forecast.

Nebius also expects to break even before taxes in the fourth quarter of 2027. Analysts previously forecast a $347 million pretax loss.

McPeake expects continued forecast volatility as Nebius expands its operations. However, he modestly raised his overall estimates.

NBIS Price Action: Nebius Group shares were down 9.78% at $116.05 at the time of publication on Friday, according to market data.