Stock Market Today, March 17: Nebius Group Falls After Announcing $3.75 Billion Capital Raise
Nebius Group (NASDAQ:NBIS), an AI-centric cloud platform infrastructure provider, closed at $116.25, down 10.47%. Shares declined after the company announced plans to raise $3.75 billion through convertible notes and loans. Investors are watching how the added leverage and potential dilution could impact its AI growth strategy.
Trading volume reached 56.4 million shares, coming in about 304% above its three-month average of 13.9 million shares.
Nebius Group IPO'd in 2024 and has grown 481% since going public.
How the markets moved today
S&P 500 (SNPINDEX:^GSPC) added 0.25% to finish Tuesday’s session at 6,716, while the Nasdaq Composite (NASDAQINDEX:^IXIC) rose 0.47% to close at 22,480. Among internet content and information industry peers, Microsoft (NASDAQ:MSFT) closed at $399.41, down 0.14%, and Oracle (NYSE:ORCL) finished at $154.7, down 0.81%, as investors reassessed AI infrastructure spending.
What this means for investors
Nebius shares plunged today, one day after a sharp spike in the stock on news of large new AI deal with Meta Platforms (NASDAQ:META) was announced. The news yesterday confirmed that demand for cloud computing capacity remains strong.
Investors sold the stock today after Nebius announced plans to raise $3.75 billion through new convertible note offerings and loans. That could lead to future dilution as well as further pressure on its financial strength.
The capital raise shouldn’t come as a surprise, though, as the investing thesis for Nebius is to continue to build AI infrastructure to support deals like the one with Meta. The question will be whether it can get sufficient return on its investments in a timely period.
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Howard Smith has positions in Microsoft. The Motley Fool has positions in and recommends Meta Platforms, Microsoft, and Oracle. The Motley Fool has a disclosure policy.
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