TLDR
- NBIS rose 9.73% over the past week, extending strong year-to-date gains
- Nebius disclosed over $40 billion in contracted AI cloud demand, giving investors rare long-term revenue visibility
- The company completed a $5.75 billion capital raise and beat Q2 earnings estimates, reporting revenue up 454% year over year to $582.3 million
- California State Teachers Retirement System increased its stake by 23,011%, now holding a 24.57% ownership position worth $17.17 billion
- Analysts hold a “Moderate Buy” consensus with an average price target of $226, though concerns remain over operating losses and negative free cash flow
Nebius Group (NBIS) opened at $226.39 on Tuesday, after climbing 9.73% over the past week. The stock has a 52-week range of $63.26 to $299.86, reflecting just how volatile this name has been.
The week’s move was driven by a wave of positive developments around its AI cloud business. The company disclosed more than $40 billion in contracted demand for AI cloud services, a number that gave investors rare visibility into future revenue.
That backlog announcement came alongside a recently completed $5.75 billion capital raise. The combination of long-term demand and fresh funding reassured investors that Nebius has the resources to keep building out its infrastructure.
The company also posted strong quarterly results. Revenue came in at $582.3 million for the quarter, up 454% year over year. That figure beat analyst expectations of $567.91 million.
On the earnings per share side, NBIS reported a loss of $0.12, which was well ahead of the consensus estimate of negative $0.67. It was a beat on both the top and bottom lines.
Institutional Interest Surges
Perhaps the most eye-catching data point came from California State Teachers Retirement System, which increased its NBIS position by 23,011% in the second quarter. The fund added 61.9 million additional units, bringing its total to 62.2 million, valued at roughly $17.17 billion. That represents a 24.57% ownership stake in the company.
Other institutional investors also moved into the stock during the quarter, though at much smaller sizes. Overall, institutional and hedge fund ownership stands at 21.90% of the float.
On the analyst side, Bank of America raised its price target from $240 to $280 with a “buy” rating. Freedom Capital upgraded the stock to “strong buy.” Morgan Stanley kept an “equal weight” rating but bumped its target from $126 to $144. The average price target across the street sits at $226, in line with where the stock is currently trading.
Risks Still on the Table
Not everything is bullish. Nebius is still losing money. The company posted a net margin of 4.55% but carries a negative return on equity of 6.03% and deeply negative free cash flow. Its debt-to-equity ratio is 0.82.
The stock also carries a beta of 4.23, meaning it moves sharply in both directions. Options data showed a tug of war between bullish and bearish sentiment during the week.
Insider activity is worth watching. Director Charles E. Ryan sold 50,000 units at an average price of $265.53, totaling $13.28 million. Director John Wilson IV Boynton sold 5,296 units at $270.99. Both transactions were executed under pre-arranged Rule 10b5-1 trading plans. Total insider sales in the last quarter came to 159,013 units worth $39.2 million.
The stock’s 50-day moving average sits at $211.89, and the 200-day moving average is at $183.27, both well below the current price.
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