Nebius Group (NBIS) Falls on AI Bubble Fears

We recently published 10 Stocks With Massive Losses; AI Firms Not Spared. Nebius Group NV (NASDAQ:NBIS) is one of the worst performers on Friday.

Nebius Group dropped its share prices by 5.16 percent on Friday to close at $68.32 apiece as investors took a cautious stance and rebalanced their portfolios amid warnings of an AI bubble.

This followed comments from OpenAI CEO Sam Altman earlier this month that the AI industry could already be entering a bubble, given the unsustainable heavy investments in the sector.

His warning triggered a sell-off among firms riding the AI wave, as investors feared that it could be a repeat of the “dot com” bubble in the 90s that led to a market crash after investors poured funds into companies with unsustainable business models.

An AI bubble poses significant implications to companies riding the boom, and Nebius Group NV (NASDAQ:NBIS) is especially exposed to such risks, particularly if returns on AI investments fail to materialize, as demand for cloud services and high-performance computing could decline and thus lead to underutilized AI infrastructures.

However, even with Friday’s drop, shares in Nebius Group NV (NASDAQ:NBIS) still increased by 25.5 percent in August alone.

While we acknowledge the potential of NBIS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.