Nebius Group (NBIS -0.45%) stock plunged 21.1% this week, according to data provided by S&P Global Market Intelligence. That shouldn't bother existing shareholders who have enjoyed the 231% gain in Nebius stock over the past year.
For those who think they missed out on the huge run in Nebius stock, it could be an opportunity, though. Investments in data centers continue to accelerate, and Nebius has customers lined up to use its compute capacity.
Image source: Nebius Group.
Capital spending by the four largest hyperscalers has already reached $300 billion through June this year. That's about 75% of what those same companies spent in all of 2025, according to recent research from The Motley Fool. Some of that money is going to Nebius. The company has generated more than $4.5 billion in net cash from operating activities in the first half of 2026. That compares to over $350 million spent on operations in the year-ago period.
NASDAQ: NBIS
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But the company needs to continue adding capacity to satisfy demand. That's why Nebius announced it would raise $5 billion by issuing convertible notes this week. Shares dropped on the news, as it adds debt and could lead to shareholder dilution should those notes be converted to common stock.
In its second-quarter letter to shareholders, Nebius detailed how growing demand is also increasing the value of its compute capacity. Contract value per megawatt of capacity has soared this year.
Returns on its invested capital look to be growing. That makes dips in the stock a good time to buy shares if investors believe the artificial intelligence infrastructure build-out has several years to go. That, and the stock's already lofty valuation, are the risks one has to balance.
