Nebius Group N.V. (NASDAQ: NBIS) weighed on Alger Spectra Fund's third-quarter performance as shares retreated from their early-summer record high of $299.86, closing Oct. 23 at $158.75.
The pullback began after the company announced convertible debt to raise additional capital—a move that triggered dilution concerns among shareholders. A broader AI infrastructure selloff in late Q3 compounded the decline.
Despite the headwinds, Alger Spectra said it views Nebius's fundamentals as intact. The fund's thesis centers on strong demand for the company's data center capacity. Nebius operates computing infrastructure equipped with advanced processors essential for AI model training and deployment. At a $43.51 billion market cap, it trades as one of the few independent AI computing providers competing against cloud giants.
NBIS has posted a 94.64 percent year-to-date gain despite the recent retreat. Its 52-week range: $73.52 to $299.86.
The fund itself lagged its benchmark in Q3. Alger Spectra Class A returned 0.29 percent (without sales charge) versus 0.45 percent for the Russell 3000 Growth Index. Technology and Consumer Discretionary holdings drove relative performance; Communication Services and Utilities dragged.
Hedge fund ownership of Nebius has grown. The number of hedge fund portfolios holding the stock rose to 86 at the end of Q2 from 60 in Q1, signaling institutional conviction ahead of the recent share weakness.
Alger Spectra's sustained position in Nebius suggests the fund sees the dilution risk as manageable relative to the company's growth trajectory in AI infrastructure.
