Nebius Stock Falls as Nvidia Partnership Concerns Weigh on AI Cloud Sector

Shares of AI cloud infrastructure provider Nebius (NBIS) fell 4.3% in morning trading, erasing prior gains as a sector-wide sell-off took hold. The decline follows reports that chipmaker Nvidia has decided to shelve revenue-sharing agreements with its AI cloud partners, according to Investing.com.

Sector-Wide Pressure

The reported change in Nvidia's partnership strategy is a significant headwind for the "neocloud" sector. These revenue-sharing deals were a key incentive for companies like Nebius, which rely heavily on Nvidia's GPU supply chain and ecosystem to build out their services. The news has created coordinated pressure on the industry, with peers CoreWeave and IREN also trading lower.

The pullback reflects concerns that the removal of these incentives could impact the profitability and growth trajectory of AI infrastructure providers. The broader market offered little support, with the Nasdaq Composite trading down a modest 0.2% during the session.

Reversal From Recent Highs

The drop marks a sharp reversal from the previous session's rally on August 27, when Nebius stock surged over 7%. That gain was fueled by two key catalysts:

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• The successful closing of an upsized convertible notes offering, which raised $5.75 billion against an initial target of $4.5 billion. Proceeds are earmarked for data center expansion and GPU procurement.
• A simultaneous price target increase from Goldman Sachs to a Street-high of $328, accompanied by a reaffirmed Buy rating.

With those positive catalysts now fully priced in by the market, investors have shifted focus to the potential impact of Nvidia's changing partner terms, leading to profit-taking.

Investor Outlook

Today's decline appears to be driven by a combination of factors rather than a single event. There were no major U.S. economic data releases or Federal Reserve announcements influencing the move. Instead, the stock's performance reflects sector-specific concerns, the digestion of a recent outsized gain, and lingering investor caution.

Analysts note that investors remain watchful of Nebius's aggressive capital expenditure plans, which management has guided to be between $20 billion and $25 billion. This spending comes against a backdrop of elevated valuation multiples, particularly after the stock's significant run from its 52-week low of $63.26.