TLDR
- Nebius Group (NBIS) trades near $141, about 54% below its $300 all-time high.
- Q3 results land Thursday before the market opens, with analysts looking for $907 million in revenue.
- Microsoft may scale back its neocloud deals, putting its top customer in question.
- Options data shows a put-to-call ratio of 1.15x and a low price mark of $113.
- Wall Street’s consensus rating is “Moderate Buy” with a mean target near $285.
Nebius Group (NBIS) goes into Thursday’s earnings report in a bear market. The stock sits near $141, down 54% from its all-time high of $300.
The Q3 report is due before the market opens on Nov. 12. Traders will be hunting for clues about the company’s ties to Microsoft.
Analysts are looking for revenue of $907 million, per Yahoo Finance data. That would be a 520% jump from a year ago.
The top estimate sits at $942 million. Barchart’s consensus calls for a loss of $0.61 per share, which is 56% worse than last year.
Nebius is also expected to give strong annual guidance. Revenue is projected at $3.35 billion this year, up 531%, and above $12.2 billion next year.
Most of that money comes from a short list of big clients. Meta Platforms and Microsoft are two of them.
Microsoft Worries Weigh on the Stock
The cloud around Microsoft is the biggest worry. Reports say it is rethinking its use of neocloud firms because of high costs and project delays.
Barchart notes that Microsoft may not renew current agreements. Without that revenue, the stock’s premium price tag would be harder to defend.
That price tag is already steep. Nebius trades at about 62 times sales.
The wider AI trade is wobbling too. Anthropic is said to be eyeing an IPO at a $1.3 trillion valuation, below the $2 trillion some analysts hoped for.
OpenAI recently raised $11 billion at a $1.25 trillion valuation. Analysts had pegged it at $1.4 trillion.
Costs are climbing as well. Prices for servers, GPUs and memory have all moved higher.
Gartner has warned that neocloud firms could book large impairments in the next few years. It points to the gap between expected revenue and costs.
Dilution, Competition and the Options Picture
Nebius has also been diluting its owners. It raised over $2 billion in Q2 and expects to raise a similar sum in Q3.
Outstanding stock has climbed to over 238 million from 218 million a year ago. The company has not announced a major new contract with a large customer either.
Competition is heating up. Nearly every Bitcoin miner has pivoted to AI, and Lambda, Nscale and Firmus have all announced large deals.
Short interest stands at 20%, a sign many investors expect more downside. The stock now trades at less than half its mid-August price.
Barchart’s options data leans bearish. The put-to-call ratio on contracts expiring Nov. 13 is 1.15x, and the low price mark of $113 points to a decline of nearly 15%.
Technicals look weak as well. NBIS sits below its major moving averages, with an RSI in the late 30s.
Wall Street is more upbeat. The consensus rating is “Moderate Buy,” and the mean price target of about $285 implies a rally of more than 2x over 12 months.
Results are due Thursday morning, Nov. 12, before the opening bell.
