Weekly insights + SMS alerts
Nebius Group N.V. (NASDAQ: NBIS) stock is trading nearly 6% lower on Friday as investors weigh concerns about artificial intelligence infrastructure spending following a warning from Gartner about the future of neocloud providers.
The decline comes as technology stocks face broader selling pressure. The Nasdaq is down 0.83%, while the S&P 500 has slipped 0.07%. The Technology Select Sector SPDR Fund is down 1.17%.
Technology research firm Gartner warned that more than 80% of neocloud providers could cease independent operations by 2030.
The forecast raises concerns for AI infrastructure companies, including Nebius, CoreWeave Inc. (NASDAQ: CRWV) and IREN Ltd. (NASDAQ: IREN).
Gartner estimates that more than $3.5 trillion in AI infrastructure spending could face impairment risk by 2030.
AI providers are expected to spend nearly $1 trillion on infrastructure in 2026, followed by another $6 trillion between 2027 and 2030.
However, Gartner projects that enterprise and consumer AI revenue attributable to these investments will reach no more than $3.6 trillion through 2030.
The firm expects AI-optimized cloud infrastructure spending to rise from $66 billion in 2027 to $174 billion in 2030. Still, that growth may not allow most providers to recover their investments before existing AI chips become outdated.
Unlike major technology companies with diversified revenue streams, neocloud providers depend heavily on AI computing demand to recover infrastructure costs.
Gartner warned that rising costs and limited business differentiation could drive widespread industry consolidation.
Nebius operates AI-focused cloud infrastructure and data centers across the U.S. and Europe. Despite its growth opportunities, Nebius remains exposed to heavy infrastructure spending and changing demand for AI computing services.
NBIS shares are trading below several key moving averages, signaling continued selling pressure.
The stock is 20.9% below its 20-day simple moving average (SMA), 20.5% below its 50-day SMA and 20.7% below its 100-day SMA.
However, shares remain 1.9% above their 200-day SMA of $174.10. This level could provide important support.
The moving average convergence divergence (MACD) indicator remains below its signal line. Its negative histogram also points to weakening momentum.
A sustained decline below the 200-day SMA could signal further downside. Meanwhile, $164.50 remains another key support level.
Nebius is expected to report quarterly earnings around Nov. 10, 2026.
Analysts forecast a loss of 79 cents per share, compared with a year-earlier loss of 40 cents. Revenue is projected to rise to $904.29 million from $146.10 million.
Wall Street maintains a Buy consensus rating, with an average price forecast of $272.62.
Rosenblatt initiated coverage with a Buy rating and a $304 price forecast on Oct. 8. William Blair initiated coverage with an Outperform rating on Sept. 30.
Meanwhile, BNP Paribas upgraded Nebius to Outperform on Sept. 24 and raised its price forecast to $399.
The MarketDash Edge scorecard highlights a sharp contrast between Nebius' momentum and valuation.
The stock has a Momentum score of 86.02, reflecting its strong longer-term performance. However, its Value score stands at just 4.82, suggesting limited support from traditional valuation measures.
Nebius has gained approximately 44% over the past 12 months despite its recent decline.
Nebius shares were down 5.90% at $177.29 at the time of publication Friday, according to market data.
Real-time alerts on price moves, news, and trading opportunities.
Join 20,000+ investors. No spam, ever.
