Nebius Group NV dropped 5.8% in morning trading on Friday, reaching $177.44, as inflation concerns and sector-specific challenges continued to weigh on AI infrastructure stocks.

The decline follows this week's September consumer price index report, which came in above expectations and raised concerns that the Federal Reserve may maintain elevated borrowing costs for an extended period. Higher interest rates pose challenges for AI infrastructure companies like Nebius, which require substantial capital access to finance data center and GPU expansion projects.

The stock's retreat also reflects broader pressures affecting the neocloud sector. A recent Gartner report warned that many neocloud operators may struggle to survive as independent entities, unsettling investor confidence across the industry.

Market anxiety intensified after bond yields at competitor CoreWeave spiked sharply mid-week, creating a liquidity scare that spread to other AI infrastructure companies.

Investor Michael Burry added to the negative sentiment by replacing his previous short position in NBIS with leveraged June put options, a move that has drawn attention to concerns about the stock's valuation.