Shares of Nebius Group (NBIS 3.21%) were sliding last month even though there was no company-specific news out on the stock.
Instead, AI infrastructure stocks like Nebius fell broadly after Oracle reported disappointing results in its first-quarter earnings report. The results and its guidance cast doubt on the momentum in the "neocloud" sector, which includes stocks like CoreWeave and Nebius. Oracle has also seen demand for its cloud infrastructure skyrocket, and it's now seen as a bellwether in the AI subsector.
Largely because of those headwinds, Nebius finished the month down 11%, according to data from S&P Global Market Intelligence. The chart below shows how the stock moved over the course of the month.
What happened with Nebius last month
Nebius had been volatile all year, so it's not surprising to see that pattern continue into December. The company is growing quickly, but also deeply unprofitable, and its business model, which involves buying GPUs and renting them out, is inherently risky due in part to the depreciation of those chips and the debt involved in the buildout, as the company is borrowing money to fund its expansion and capital expenditures.
Nebius stock fell in the days after Oracle's earnings report, losing 19% over a week.
Oracle dropped as the company missed revenue estimates and its capital expenditures soared, jumping to $12 billion, while analysts had expected $8.25 billion.
Nebius rebounded following that slide as investors were reassured about the AI boom after Micron posted strong results and guidance in its earnings report, showing that demand for high-bandwidth memory chips for AI is strong and accelerating. It also benefited from an analyst upgrade for CoreWeave, showing that there's still investor confidence in the neocloud sector, despite the slide in November and in December for Nebius.
Image source: Getty Images.
What's next for Nebius
It's still early in 2026, but the AI trade appears to be coming back as Nebius is up 15% through Jan. 7. Stocks have reacted to positive commentary from Nvidia CEO Jensen Huang at the CES Conference, as well as a variety of upgrades for key AI stocks this year. Northland, for example, said Nebius was a top pick for 2026, and its price target of $211 implied the stock would double. Nebius also said it would deploy the Rubin platform in the second half of 2026.
Nebius will have to continue to deliver strong growth this year in order to move higher, but it's also likely to follow broader investor sentiment in the AI sector.
