Key Highlights
- Nebius shares slipped 1.6% following a Q2 earnings per share loss of $0.68, marginally below the $0.67 analyst consensus
- Quarterly revenue exploded 454% compared to the prior year, reaching $582.3 million and exceeding analyst projections, while annual recurring revenue approached $3 billion
- BofA Securities lifted its price objective to $310 while maintaining a Buy recommendation following the impressive quarterly performance
- Noted investor Michael Burry expanded his bearish wager at $247 per share, characterizing Nebius as representative of “what the top of a boom looks like”
- Analyst community maintains a “Moderate Buy” stance with a mean price objective of $260.20, suggesting approximately 2% potential appreciation
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 decline followed the company’s second-quarter financial disclosure that fell marginally short of analyst projections.
The AI infrastructure provider delivered an adjusted loss of $0.68 per share compared to Wall Street’s anticipated loss of $0.67. While the shortfall was minimal at just one cent, it was sufficient to dampen enthusiasm after the previous session’s impressive 34% rally.
On the top-line front, however, results were substantially stronger. The company generated $582.3 million in quarterly revenue, representing a remarkable 454% year-over-year expansion and surpassing the $567.91 million analyst estimate. The firm’s annual recurring revenue metric climbed to roughly $3 billion, while its contracted backlog has ballooned beyond $40 billion.
Share turnover accelerated significantly, with approximately 36 million shares traded throughout the session. This figure represented more than twice the typical daily volume of 17.8 million shares.
BofA Securities Lifts Price Objective
Bank of America equity analyst Tal Liani maintained his Buy recommendation while elevating his price target from $280 to $310. Liani emphasized the company’s second-quarter EBITDA margin of 40.5%, which substantially exceeded the Street’s 27.8% projection, and observed that Nebius’ approach of marketing capacity nearer to actual deployment is enhancing profitability per unit.
Liani further noted that the company’s standard 1-3 year agreements are producing $20-$25 million in revenue per megawatt, whereas shorter-duration 3-6 month contracts designed for clients requiring immediate capacity are yielding $40-$50 million per megawatt.
The organization reaffirmed its objective of achieving 800 MW to 1 GW of connected power capacity by the conclusion of 2026, which helped alleviate certain investor apprehensions regarding the capacity expansion timeline at its Vineland location.
Additionally, Nebius revealed a partnership with Vantage Data Centers to establish NVIDIA-powered artificial intelligence infrastructure at a Newport, Wales facility, broadening its presence in the United Kingdom.
Burry Amplifies Bearish Position
Not all market participants share the optimistic outlook. Michael Burry, celebrated for his prescient “Big Short” wager, revealed he has increased his short position in NBIS at the $247 price level. In a Substack publication, he stated: “Nebius is what the top of a boom looks like.”
Burry expressed concerns regarding Nebius’ elevated pricing structure on shorter-term contracts. He initially established his bearish position at approximately $212 per share.
Robert W. Baird elevated its price target to $340 while maintaining an Outperform designation. Conversely, DA Davidson occupies a more cautious stance, holding a Neutral rating with a $175 price objective.
Regarding insider transactions, Chief Executive Officer Arkadiy Volozh divested 46,627 shares on July 1st at an average execution price of $235.45, decreasing his stake by 5.37%. Chief Financial Officer Maria Del Dado Alonso Sanchez sold 1,509 shares on June 2nd at $276.20 per share.
The aggregate Wall Street consensus rating stands at Moderate Buy, derived from seven Buy recommendations and four Hold ratings. The average analyst price target of $260.20 implies approximately 2% upside potential from prevailing levels.
NBIS stock has advanced roughly 205% on a year-to-date basis.
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