Nebius Group (NBIS) shares fell as much as 6.8% on Thursday, as investors weighed the company's new $3.5 billion credit facility against growing concerns about debt-funded expansion across the AI infrastructure sector. The decline came amid a broader market sell-off that also hit other neocloud providers, including CoreWeave and several data centre operators.
The Nvidia-backed company announced it had secured a senior secured credit facility from Citi to support its near-term development plans. Proceeds will be used for data centre development, GPU purchases, and general corporate purposes, according to the company.
The financing, which matures in 364 days, initially carries an interest rate of Term SOFR plus 2.75%, rising to a maximum of 3.50%, subject to adjustments. Nebius Chief Operating Officer Ophir Nave said the facility demonstrates the company's flexibility in deciding when and how to raise capital, while noting that further financing will be needed for the next phase of growth.
Nave also highlighted that Nebius has approximately $40 billion in long-term customer contracts that could potentially serve as collateral. The company said it is sequencing its financing to optimise its long-term cost of capital. However, the short maturity of the facility places the borrowing within a sector where investors have become increasingly sensitive to financing conditions and debt obligations.
Neocloud stocks face mounting credit and short-selling pressure
Nebius is among several AI infrastructure companies facing increased scrutiny over their financing strategies. CoreWeave has been at the centre of the recent sell-off, losing roughly a quarter of its market value last week as its shares and bonds came under pressure. Yields on some CoreWeave bonds climbed to around 15%, compared with approximately 9.675% when the debt was issued last year.
Piper Sandler cut its price target on Nebius by 22% to $185 on Wednesday, warning that neocloud stocks could remain under pressure until their financing outlook becomes clearer. Gartner has also predicted that more than 80% of neocloud providers will cease operating independently by 2030.
Short-selling activity has increased across the sector. According to ORTEX data cited by Reuters, short interest in CoreWeave, Nebius, IREN, Applied Digital, and Core Scientific ranged from approximately 20% to 26% of their free floats. Short sellers have generated an estimated $6 billion in paper profits across US neocloud and data centre companies so far in October, reflecting the sharp decline in their share prices.
Nebius short interest rises as investors reassess AI spending
Nebius has experienced a notable increase in bearish positioning. Short interest in the company rose to 20% of its free float, from 15.4% at the start of 2026. Investors betting against Nebius recorded approximately $2.94 billion in paper profits during October, although their year-to-date paper losses stood at $3.33 billion.
CoreWeave's short interest reached 23.7% of its free float, up from 19.6% at the start of the month. Short sellers made nearly $1.7 billion in paper profits from the stock during October. Bernstein reiterated its Underweight rating on CoreWeave, while noting that finding bullish investors had become more difficult.
The developments highlight the tension between continued demand for AI computing capacity and the financing required to build it. For Nebius and its peers, investor sentiment will depend partly on whether expansion plans can be funded on terms that support sustainable growth. As investors weigh how neoclouds will fund their buildouts, the sector's sharp swings are likely to keep drawing attention on trading platforms.
This article is for informational purposes only and does not constitute financial advice.
