Key Takeaways
- Shares of Nebius Group surged up to 7% Thursday, reaching $241.20, following an upgrade from BNP Paribas Exane to Outperform.
- The firm elevated its price target from $260 to $399, suggesting significant upside potential from the previous session’s close.
- The positive call comes as Nebius prepares to implement price increases of 17% to 25% across its GPU and CPU cloud offerings effective October 1.
- Second quarter revenue surged 454% annually to $582.3 million, exceeding Wall Street expectations.
- The stock’s advance contrasted sharply with broader market weakness, as major indices closed lower Thursday.
Shares of Nebius Group advanced as much as 7% during Thursday’s session, peaking at $241.20 after beginning the day at $231.84. The rally followed an upgrade from BNP Paribas Exane, which elevated the AI infrastructure provider from Neutral to Outperform.
Alongside the rating change, the investment firm boosted its price objective to $399 from its previous $260 forecast. This updated target suggests approximately 76% appreciation potential from Wednesday’s closing level of $226.61.
The bullish stance from BNP Paribas Exane represents a notable positive perspective on Nebius amid what remains a divided analyst community. Current consensus data indicates a “Moderate Buy” rating, with an average price forecast of $241.80 across covering analysts.
Drivers Behind Growing Optimism
The rating enhancement arrives on the heels of Nebius’s announcement regarding upcoming price adjustments for its on-demand GPU cloud portfolio beginning October 1. The company will implement increases ranging from approximately 17% to 21% across Nvidia H100, H200, B200 and B300 configurations.
Additionally, AMD EPYC Genoa CPU offerings will experience price hikes of approximately 25%. Market observers interpret these adjustments as evidence of constrained AI computing availability rather than purely margin-driven decisions, particularly given this represents the second pricing adjustment in recent months.
Nebius delivered second quarter AI cloud revenue of $574.9 million alongside an adjusted EBITDA margin approaching 50%. Total quarterly revenue reached $582.3 million, representing a 454% year-over-year increase and surpassing analyst projections of $567.91 million.
The firm also announced a per-share loss of $0.12, significantly outperforming the consensus forecast calling for a $0.67 loss. This compares to earnings of $2.38 per share during the corresponding quarter last year.
Thursday’s stock performance proved particularly notable given broader market headwinds. The Nasdaq declined 0.5%, while both the S&P 500 and Dow Jones retreated 0.4%, indicating the NBIS rally stemmed purely from company-specific catalysts.
Competing neocloud providers including CoreWeave and IREN have faced pressure during recent trading sessions amid questions surrounding GPU pricing dynamics. This backdrop made Nebius’s Thursday advance particularly distinctive among industry peers.
Skepticism Remains Among Some Observers
BNP Paribas Exane’s optimism isn’t universally shared across Wall Street. Rothschild Redburn recently launched coverage with a Sell rating, highlighting declining GPU rental rates and intensifying competition from hyperscale cloud providers as key risk factors.
Notable investor Michael Burry has also revealed increased short exposure to Nebius alongside other AI-focused equities. His concerns center on negative free cash flow generation, substantial capital expenditure requirements and elevated customer concentration risks.
Company insiders have divested approximately $43.6 million in Nebius shares during the trailing 90-day period. Notable transactions include CRO Marc Boroditsky’s sale of 7,000 shares on September 14 at an average execution price of $209.08.
Director John Wilson Iv Boynton similarly sold 5,296 shares on August 14 at an average price of $270.99. Both transactions occurred through predetermined Rule 10b5-1 trading arrangements.
Nebius maintains a market capitalization of $60.69 billion alongside a beta coefficient of 4.23, underscoring its elevated volatility profile. The equity’s 50-day moving average currently stands at $213.92, while the 200-day moving average registers at $193.97.
The stock continues trading substantially below its 52-week peak of $299.86. Institutional stakeholders collectively hold approximately 21.90% of outstanding shares.
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