Why Nebius Group Stock Fell 11% in December

Core Insights - Nebius Group's stock experienced a decline of 11% in December, primarily influenced by Oracle's disappointing earnings report, which raised concerns about the neocloud sector's momentum [2][3][5] - Following Oracle's report, Nebius saw a significant drop of 19% within a week, reflecting broader market reactions to the AI infrastructure sector's challenges [6][7] - Despite the downturn, Nebius rebounded after positive earnings from Micron, indicating ongoing investor confidence in the AI market [8] Company Performance - Nebius has been volatile throughout the year, with its business model involving GPU purchases and rentals posing inherent risks due to chip depreciation and debt from expansion efforts [5] - The company is currently unprofitable but is experiencing rapid growth, which is critical for its future stock performance [5][10] Market Outlook - As of early January 2026, Nebius's stock has increased by 15%, buoyed by positive sentiment from Nvidia's CEO and various upgrades for key AI stocks [9] - Analysts have identified Nebius as a top pick for 2026, with a price target of $211, suggesting potential for the stock to double [9] - Continued strong growth will be essential for Nebius to maintain upward momentum, while it is likely to be influenced by overall investor sentiment in the AI sector [10]