Nebius Group (NBIS) saw its stock plummet 5.68% in pre-market trading on Tuesday, despite announcing a significant $3 billion deal with Meta. The sharp decline comes as the AI cloud infrastructure provider reported third-quarter revenue that fell short of analyst expectations, overshadowing the positive news of the Meta partnership.

Nebius reported Q3 revenue of $146.1 million, marking a substantial 355% year-over-year increase. However, this figure fell short of the $155.1 million estimated by analysts, according to IBES data. The revenue miss appears to have spooked investors, leading to the pre-market selloff despite the company's impressive growth rate.

In a bid to reassure investors about its future prospects, Nebius announced a new agreement to deliver AI infrastructure to Meta, valued at approximately $3 billion over five years. The company also provided optimistic projections, stating it believes it can achieve an annualized run-rate revenue of $7 billion to $9 billion by the end of 2026. Additionally, Nebius expects to have over 2.5GW of contracted power by the end of 2026, with 800MW to 1GW of connected power anticipated by that time.

Despite these positive developments, the market seems to be focusing on the short-term revenue miss rather than the long-term growth potential. Analysts suggest that while the Meta deal and future projections are encouraging, investors may be concerned about the company's ability to meet near-term expectations in the rapidly evolving AI infrastructure market. The pre-market plunge highlights the volatile nature of high-growth tech stocks and the market's sensitivity to earnings reports in the current economic climate.