Shares of Nebius (NBIS) plummeted 5.10% in intraday trading on Thursday, as investors reacted to the company's announcement of a substantial $3.75 billion capital raise through convertible bonds and equity offerings. The move comes just days after Nebius unveiled a major $17.4 billion deal with Microsoft for AI cloud computing capacity.

The Amsterdam-based AI infrastructure provider priced its $1 billion public offering of Class A common stock at $92.50 per share, representing a discount to Wednesday's closing price of $93.39. Additionally, Nebius is issuing $2.75 billion in convertible senior notes split between maturities in 2030 and 2032, with initial conversion prices set at a 50% premium to the equity offering price.

While the capital injection aims to fuel Nebius' ambitious expansion plans, including data center capacity growth and hardware acquisitions, the market's negative reaction suggests concerns over potential share dilution. The offering's pricing below the previous closing price and the convertible nature of the debt issuance may have amplified these worries.

Despite the short-term stock pressure, Nebius maintains that this funding will support its growth trajectory, particularly in light of its recent large-scale contract with Microsoft. The company plans to use the proceeds to expand its AI computing infrastructure, secure strategic land plots, and position itself as a key player in the rapidly evolving AI cloud services market.