Position News · NBIS
Nebius Falls 21.9% in Two Sessions as Meta Eyes Its Own AI Cloud
Shares of Nebius Group (NBIS) fell from $276.17 to $215.62 over two trading sessions this week, a combined decline of 21.9%, after Bloomberg reported that Meta Platforms is building a cloud computing business to resell its excess AI compute capacity — a move that would put Meta in direct competition with the "neocloud" providers, including Nebius and CoreWeave, that Meta itself pays to rent compute from today.
The irony is what made the selloff so sharp: Meta is one of Nebius's largest disclosed customers, having committed to a multiyear AI infrastructure agreement with Nebius reportedly worth up to $27 billion. A customer that size turning into a competitor is a different kind of risk than ordinary demand softness, and the market repriced accordingly — volume on the two down days ran roughly double the recent daily average, consistent with fast, forced selling rather than a slow re-rating.
Nebius was already trading at a demanding multiple — around 125x trailing sales going into the report — which left little room to absorb bad news. Several outlets covering the move framed it as a reassessment of the broader "neocloud" trade, not a Nebius-specific problem.
What this means for the book
NBIS is 2.29% of the portfolio outright, and I separately hold a 2x leveraged ETF on the same stock (NBIL, 5.27%). The July letter flagged this combination as a live risk — leveraged-plus-underlying exposure to one company being larger than either line item suggests — and this is exactly the kind of move that risk was written about. NBIL's daily reset means the leveraged position lost more than 2x the underlying's decline over the two days. I'm not trading on this yet; I want to see whether Meta's plans are confirmed beyond a single report, and how they interact with Nebius's separately disclosed $17 billion Microsoft compute agreement, before deciding whether the thesis is actually broken or just priced for more fear than the facts support.