Nebius stock drops 14% on data center delays and regulatory fears

Nebius Group NV shares fell 14% in morning trading after a report revealed construction delays at a data center project tied to a $17.4 billion Microsoft contract, linked to a roughly $5 billion shortfall in Microsoft's AI infrastructure spending. Satellite imagery showed slower-than-expected building progress at the New Jersey facility, compounding fragile investor sentiment in the capital-intensive neocloud sector. Democratic victories in Tuesday's midterm elections, including the Texas governor's race where the winner campaigned for an immediate data center moratorium, raised fears of stricter federal and state regulation. Competitors CoreWeave and IREN also dropped sharply. UBS analysts estimated about 30% of expected US data center capacity growth through 2028 could be at risk if regulatory pressure materializes. The broader market offered no support, with NASDAQ falling 3.9%, S&P 500 down 2.3%, and Dow Jones off 1.3%. Nebius had already lost roughly 39% over the past month amid financing cost concerns, analyst price target cuts, and insider sales totaling about $38 million over 90 days. The stock hit a session low of $119.41, far below its 52-week high of $299.86, as investors await third-quarter results on November 12.