The Move
Shares of Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) are up 3.71% in Tuesday’s midday session, changing hands near $190.94, while Oracle (NYSE:ORCL) has slipped 3.93% to $145.12. The catalyst: NVIDIA (NASDAQ:NVDA) is reportedly steering a major new funding push toward “neocloud” AI infrastructure partners. It is one of the sharpest single-day splits between the two AI cloud plays in months.
NVIDIA’s Neocloud Funding Push Fuels the Divergence
Reports Tuesday describe a roughly $500 billion investment partnership designed to channel capital to smaller AI cloud specialists. Nebius sits near the top of that list. NVIDIA already backed the company with a $2 billion pre-funded warrant investment, and Nebius recently signed a $27 billion five-year agreement with Meta covering $12 billion of compute and $15 billion of flexible capacity. You can read more about NVIDIA’s $500 billion infrastructure fund here.
For Oracle, the market read is competitive displacement per its latest SEC filings. Oracle’s Q4 FY26 cloud infrastructure revenue reached $5.79 billion, up 93% year over year, and remaining performance obligations swelled to $638 billion, of which $75 billion is tied to prepaid or customer-supplied GPU deals. NVIDIA funding a parallel channel through neoclouds erodes Oracle’s premium as the go-to AI hyperscaler alternative.
The split in sentiment today is clear. Small neocloud stocks like TeraWulf, Hut 9, Galaxy Digital, and Core Scientific are rising. Meanwhile, larger cloud computing providers are falling. CoreWeave and Oracle have had past partnerships with NVIDIA, but fears this capital might be used to strengthen rivals are the dominant storyline today. Meanwhile, hyperscalers like Amazon, Microsoft, and Alphabet were also down this morning on fears of NVIDIA’s infrastructure funding going to smaller rivals and potentially flooding enough compute that prices will come down.
Context: Growth Story Meets a Capital Story
Nebius came into today with momentum. Q2 FY26 revenue hit $399 million, up 279.6% year over year, with the AI Cloud segment growing 841%. Adjusted EBITDA flipped positive to $129.5 million, and remaining performance obligations reached $33.6 billion.
Management guided FY26 revenue to $3.0 billion to $3.4 billion and ARR to $7 billion to $9 billion at roughly 40% adjusted EBITDA margin margin. Even so, the stock had dropped over the prior week and past month, so today’s bounce reads as a sentiment reset rather than a breakout to new highs.
It’s important to note that Nebius reports earnings tomorrow morning, so some flows into the stock could be positioning before that report.
Oracle is the mirror image. Shares are down 38.9% over the past year and 21.75% year to date, even after a weekly rebound coming into the session. Reddit sentiment on Oracle sits neutral at 48, while NBIS holds a bullish 78 across wallstreetbets and options threads.
Analyst targets echo the split: Nebius carries a $250.75 average price target against today’s price near $191, with 11 Buy, 5 Hold, and 1 Sell ratings.
Valuation is the other axis to track. Nebius trades at roughly 72x trailing earnings versus Oracle at 25x, so today widened an already meaningful multiple gap.
Zoom out and the neocloud thesis is straightforward. NVIDIA’s Q1 FY27 data center revenue reached $75.25 billion, up 92%, with networking up 199%. CEO Jensen Huang called the AI factory buildout “the largest infrastructure expansion in human history.” Directing capital into neoclouds accelerates that expansion without waiting on hyperscaler procurement cycles. Nebius has already contracted more than 4 GW of power by year-end 2026, with new AI factories in Pennsylvania (up to 1.2 GW), Finland (310 MW), and Missouri (1.2 GW).
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