New York, May 19, 2026, 10:39 EDT
Nebius Group N.V. shares dropped hard on Nasdaq Tuesday morning, with pressure coming from news of a new Google-Blackstone AI cloud project and a downgrade from D.A. Davidson. The stock was one of this year’s stronger AI infrastructure names until today.
Nebius shares fell 7.5% to $184.84 in Amsterdam trading. The stock dropped to $183.42 at its lowest, after starting the session at $191.25. The Invesco QQQ Trust, a major Nasdaq-100 ETF, slipped 1.2%.
Nebius is turning into a gauge for how much appetite investors have for the new neocloud stocks—these are the groups leasing out AI computing power to both developers and bigger tech customers. The basic bet in the trade is that chip supply, data center power and AI servers can’t keep up with how fast demand is moving.
Google and Blackstone are moving to set up a U.S. AI cloud firm, putting pressure on an earlier bet in the sector. Blackstone has pledged $5 billion in equity, and the two plan to have 500 megawatts of data-center capacity running by 2027. The company will provide Google’s Tensor Processing Units—TPUs—custom AI chips for model training and inference, on a compute-as-a-service basis.
D.A. Davidson stepped back from Nebius, cutting its rating to Neutral from Buy. The firm left the $250 price target unchanged but noted the stock’s premium valuation limits short-term upside after the recent rally.
D.A. Davidson’s Gil Luria told the Wall Street Journal the firm is “taking a breather” on Nebius after a run that saw shares more than double this year. He also called Nebius “deservedly a staple of the AI trade.” Wall Street Journal
CoreWeave (AI), which is also in AI cloud infrastructure, dropped 7.8% to $95.66 in morning trading. Investors appeared to be rethinking the broader AI compute trade, not just Nebius.
Nebius posted a big jump in growth last week. First-quarter revenue hit $399.0 million, up 684% from $50.9 million a year ago. Adjusted EBITDA came in at $129.5 million, a non-standard figure cutting out interest, taxes, depreciation, amortization and some extras. The company also said it secured up to 1.2 gigawatts of power and land for a new AI factory that it owns in Pennsylvania.
Nebius now sees its 2026 capital expenditure between $20 billion and $25 billion, up from a previous $16 billion to $20 billion. The company raised its expected spending on data centers, chips and hardware. For the first quarter, capex jumped to around $2.5 billion compared with $544 million a year ago.
Management says demand, not customer appetite, is holding things back. “We typically see several customers competing for every GPU we bring online,” founder and CEO Arkady Volozh told Reuters. He was talking about graphics processing units, the chips needed for big AI computing jobs. Reuters
Nebius is turning to big customers and partners to help fund the expansion. In a letter to shareholders, Volozh said the company’s contracted capacity is already past 3.5 gigawatts, and Nebius is aiming for over 4 gigawatts by the end of the year. He also pointed to a second major deal with Meta worth as much as $27 billion, along with a $2 billion investment from Nvidia.
The risk is the story doesn’t allow much margin for error. Delays in power hookups, data-center builds or chip shipments could push Nebius into higher costs before it starts seeing matching revenue. And if Google’s TPU cloud business finds demand, investors might cut their view of Nvidia-based cloud offerings.
Tuesday’s selloff doesn’t look like a hit to AI demand right now. It seems more about price. Nebius is showing fast revenue growth and landing big contracts, but the market wants to see the company defend a valuation built on delivering quickly in a capital-intensive space.
