Shares of Nebius Group (NBIS) plummeted 5.09% in Tuesday's pre-market trading session, as investors reassessed the company's rapid growth in the artificial intelligence (AI) infrastructure market against mounting concerns over its increasing debt load. The stock's decline comes amid a broader evaluation of AI-focused companies and their financial strategies to meet the surging demand for computing power.

Nebius Group, like its competitor CoreWeave, has been experiencing explosive growth due to the insatiable appetite for AI computing capacity. The company's second-quarter sales soared 625% year-over-year to $105.1 million, reflecting the booming AI market. Recently, Nebius signed a multi-year deal with Microsoft to deliver dedicated computing capacity, further solidifying its position in the industry. However, this rapid expansion has come at a cost, with the company's debt ballooning from just $6.1 million at the end of 2024 to nearly $1 billion by the end of the second quarter of 2025.

While the AI market's growth potential remains strong, with projections suggesting an increase from $255 billion in 2025 to $1.7 trillion by 2031, investors appear to be growing wary of the financial risks associated with aggressive expansion strategies. The stock's decline may reflect concerns that Nebius's increasing debt load could become unsustainable if the company's sales growth were to slow. As both Nebius and CoreWeave race to expand their data center footprints, market participants are closely monitoring the balance between growth opportunities and financial stability in the competitive AI infrastructure sector.