Nebius (NBIS) Stock Surges 7% on Analyst Upgrade Despite Market Downturn

TLDR

• Shares of Nebius Group surged as much as 7% Thursday, reaching $241.20, following a BNP Paribas Exane upgrade to Outperform from Neutral.
• The investment bank boosted its price target to $399 from $260, suggesting significant upside potential from current levels.
• The positive call comes after Nebius announced price increases of 17% to 25% for its GPU and CPU cloud services, effective October 1.
• Second-quarter revenue surged 454% year-over-year to $582.3 million, exceeding Wall Street expectations.
• The stock’s advance contrasted sharply with weakness across major indices, as the Nasdaq, S&P 500, and Dow all declined Thursday.

Nebius Group shares rallied as much as 7% during Thursday’s session, peaking at $241.20 after starting the day at $231.84. The advance followed BNP Paribas Exane’s decision to upgrade the AI infrastructure provider from Neutral to Outperform.

Nebius Group N.V., NBIS

Alongside the rating change, the investment bank increased its price objective to $399 from a previous $260. Based on Wednesday’s closing price of $226.61, this new target represents approximately 76% potential upside.

The bullish stance from BNP Paribas Exane introduces another optimistic perspective on Nebius, though analyst sentiment remains divided. The stock currently holds a “Moderate Buy” consensus rating, with an average price target of $241.80 across covering analysts.

What’s Driving the Bullish Sentiment

The upgrade arrives on the heels of Nebius’s announcement to increase pricing for its on-demand GPU cloud offerings beginning October 1. The company will implement price hikes of approximately 17% to 21% across Nvidia H100, H200, B200, and B300 instances.

Additionally, AMD EPYC Genoa CPU pricing will increase by roughly 25%. Market observers interpret these adjustments as evidence of constrained AI computing capacity rather than cost management, particularly given this marks the second pricing increase in recent months.

Nebius delivered second-quarter AI cloud revenue of $574.9 million with an adjusted EBITDA margin approaching 50%. Total quarterly revenue reached $582.3 million, representing a 454% increase from the prior-year period and surpassing analyst expectations of $567.91 million.

The company recorded a per-share loss of $0.12, significantly outperforming the consensus forecast of a $0.67 loss. This contrasts with earnings of $2.38 per share during the same quarter last year.

Thursday’s stock advance occurred against a backdrop of broader market weakness. The Nasdaq declined 0.5%, while both the S&P 500 and Dow Jones dropped 0.4%, underscoring that NBIS’s performance was driven purely by company-specific developments.

Competing neocloud providers such as CoreWeave and IREN have faced headwinds in recent trading sessions amid GPU pricing concerns. This context made Nebius’s strong performance particularly noteworthy relative to industry peers.

Bears Remain Skeptical

BNP Paribas Exane’s optimism isn’t universally shared among Wall Street analysts. 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.

Prominent investor Michael Burry has disclosed increased short positions in Nebius and related AI stocks. His concerns center on negative free cash flow, substantial capital expenditure requirements, and customer concentration risks.

Company insiders have offloaded approximately $43.6 million in Nebius shares during the past 90 days. CRO Marc Boroditsky sold 7,000 shares on September 14 at an average price of $209.08.

Director John Wilson Iv Boynton divested 5,296 shares on August 14 at an average price of $270.99. Both transactions were conducted through pre-established Rule 10b5-1 trading arrangements.

Nebius maintains a market capitalization of $60.69 billion and exhibits a beta of 4.23, indicating considerable volatility. The stock’s 50-day moving average stands at $213.92, compared to a 200-day average of $193.97.

The stock continues trading well beneath its 52-week high of $299.86. Institutional ownership accounts for approximately 21.90% of outstanding shares.