Key Takeaways
- Nebius shares declined 1.6% following a Q2 earnings per share loss of $0.68, which came in a penny below the Street’s $0.67 forecast
- Quarterly revenue exploded 454% compared to last year, reaching $582.3 million and exceeding analyst projections, while annual recurring revenue approached $3 billion
- BofA Securities lifted its price objective to $310 from $280, maintaining its Buy recommendation following the impressive Q2 performance
- Famous investor Michael Burry expanded his bearish position at the $247 level, describing Nebius as exhibiting signs of “the top of a boom”
- Analyst consensus stands at “Moderate Buy” with a mean price objective of $260.20, suggesting approximately 2% potential upside
Shares of Nebius Group (NBIS) retreated 1.6% during Thursday’s trading session, settling at $255.04 after touching an intraday bottom of $247.38. The selloff followed the company’s second-quarter earnings announcement, which fell marginally short of analyst forecasts.
The AI infrastructure provider disclosed an adjusted loss of $0.68 per share compared to the consensus projection of $0.67. Despite the minor shortfall of just one cent, the disappointment contributed to profit-taking after shares had surged 34% in the prior session.
On the revenue front, however, results proved far more impressive. The company generated $582.3 million during the quarter, marking a dramatic 454% increase from the year-ago period and surpassing the $567.91 million analyst estimate. The firm’s annual recurring revenue reached approximately $3 billion, while its contracted backlog has ballooned beyond $40 billion.
Market activity intensified considerably, with approximately 36 million shares traded throughout the day. This volume represented more than twice the typical daily average of 17.8 million shares.
BofA Securities Lifts Price Objective
Bank of America analyst Tal Liani maintained his Buy recommendation while increasing his price target to $310 from a previous $280. Liani emphasized the company’s Q2 EBITDA margins of 40.5%, which significantly exceeded Wall Street’s 27.8% projection, and observed that Nebius’ approach of selling infrastructure capacity nearer to actual deployment is enhancing profitability metrics.
The analyst further noted that standard 1-3 year agreements are yielding $20-$25 million per megawatt, whereas abbreviated 3-6 month arrangements catering to clients with urgent requirements are fetching $40-$50 million per megawatt.
Management reaffirmed its goal of achieving 800 MW to 1 GW of connected power by the conclusion of 2026, which addressed some investor questions regarding capacity expansion at the company’s Vineland location.
The company additionally unveiled a partnership with Vantage Data Centers to implement NVIDIA-powered AI infrastructure at a Newport, Wales facility, broadening its presence in the United Kingdom.
Big Short Investor Expands Bearish Bet
Skepticism remains among certain market participants. Michael Burry, famous for his prescient housing market wager, revealed he increased his short position in NBIS at $247. In a Substack publication, he stated: “Nebius is what the top of a boom looks like.”
Burry expressed reservations about Nebius‘ premium pricing structure on abbreviated contract terms. He initially established a short position around the $212 price level.
Robert W. Baird elevated its price objective to $340 while maintaining an Outperform rating. Conversely, DA Davidson holds a Neutral stance with a $175 target.
Regarding insider transactions, Chief Executive Arkadiy Volozh disposed of 46,627 shares on July 1st at an average price of $235.45, trimming his stake by 5.37%. Chief Financial Officer Maria Del Dado Alonso Sanchez sold 1,509 shares on June 2nd at $276.20.
The aggregate Wall Street consensus registers as Moderate Buy, derived from seven Buy recommendations and four Hold ratings. The mean price target of $260.20 indicates approximately 2% upside potential from present levels.
Year-to-date, NBIS stock has climbed roughly 205%.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
