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Nebius Group (NBIS) Ends 5.4% Lower as $18-Billion Cloud Computing Deal Glow Fades
The Quick Take
Nebius Group N.V. (NASDAQ: NBIS) fell 5.4% to close at $128.15 as investors cooled on the company’s massive $18-billion cloud computing partnership with Microsoft.
The slide follows weeks of intense enthusiasm after the announcement of the landmark deal — a surge that has now given way to investor fatigue, cautious positioning, and questions about execution.
What Actually Happened
Nebius stock slipped as traders moved to lock in profits and reset expectations.
The company recently signed a headline-grabbing $17–18 billion cloud infrastructure deal with Microsoft, under which Nebius will supply GPU capacity from its new Vineland, New Jersey data center over the next several years.
Funding for the build-out is expected to come from a mix of cash flow, convertible notes, and new debt issuance, part of a broader expansion strategy aimed at positioning Nebius as a global leader in artificial-intelligence infrastructure.
In September, Nebius also raised $1.15 billion through convertible senior notes and an additional $150 million via underwriter share options — capital the company says will accelerate data-center deployment and support future growth.
Despite the progress, sentiment has cooled. Traders appear to believe the good news is already priced in, with shares having rallied more than 400% year-to-date before this week’s pullback.
Why The Stock Dropped
1. The euphoria has faded.
The Microsoft partnership was initially viewed as transformational, but after weeks of outsized gains, investors have shifted toward caution. Much of the optimism was already reflected in the stock price.
2. Profit-taking set in.
After a year of triple-digit returns, some investors are simply cashing out. High-momentum AI names often see short-term reversals after major announcements.
3. Execution risk is real.
The Microsoft deal is enormous, but success depends on Nebius actually delivering GPU infrastructure on time and on budget. Large-scale data-center deployment is expensive and logistically complex.
4. Valuation is stretched.
Even with explosive revenue growth, Nebius trades at a premium to peers. Investors may be pausing to reassess fundamentals before chasing the next leg higher.
5. Financing uncertainty.
The company’s aggressive expansion and debt issuance raise questions about long-term capital structure and cash-flow sustainability.
Context: From Yandex to Nebius
Nebius emerged from the corporate restructuring of Yandex, the Russian technology company that delisted from the Nasdaq after the 2022 invasion of Ukraine. The non-Russian operations spun out, rebranded, and relocated to Amsterdam, forming Nebius as a new independent AI cloud provider.
Since then, the company has grown rapidly — transforming from a niche spin-off into one of the fastest-scaling AI infrastructure firms globally. In the second quarter of 2025, Nebius reported revenue of $105 million, up 625% year-over-year.
That momentum, combined with the Microsoft partnership, made Nebius one of the market’s hottest stocks in 2025. The problem: expectations are now sky-high.
What The Market Is Saying
The pullback isn’t necessarily bearish — it’s reflective of a maturing trade. AI infrastructure plays have rallied hard throughout 2025, and many investors are rotating toward less speculative names while waiting for tangible delivery milestones.
Nebius’ volatility is nothing new. The stock has seen multiple 10%-plus daily moves this year, and that pattern will likely continue until earnings visibility improves.
For now, the market seems to be saying: prove it.
What to Watch Next
| Catalyst / Indicator | Why It Matters |
|---|---|
| Data-center deployment progress | Will show whether Nebius can execute on its Microsoft contract at scale. |
| GPU infrastructure capacity ramp | Indicates real demand and operational capability. |
| Revenue growth trajectory | Must continue triple-digit expansion to justify valuation. |
| Debt and capital management | Determines sustainability of growth funding. |
| New customer wins beyond Microsoft | Proves Nebius isn’t a one-deal story. |
My Take: The Glow Dimmed, Not Gone
This sell-off looks more like a recalibration than a collapse. Investors who chased the Microsoft hype are taking profits, but the fundamental story remains strong: Nebius is now a legitimate contender in global AI cloud infrastructure.
That said, execution is everything. Building data-center capacity at hyperscale is expensive, operationally risky, and timing-sensitive. If Nebius delivers, today’s weakness could look like a blip. If it stumbles, the downside could be swift.
For growth investors, this is a stock to watch closely — not one to ignore.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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