Nebius Group (NBIS) Faces Volatility Amid Strong AI Growth Initiatives and Recent Price Decline

Technical Analysis

Nebius Group N.V. (NBIS) closed at $47.13 on June 13, 2025, down 6.26% on heavy volume of 14.26 million, exceeding the average 12.40 million shares traded. The sharp decline follows the recent strong performance that pushed the stock close to its 52-week high of $55.04. The 14-day RSI is at 66, approaching overbought territory, but not signaling an extreme condition yet. Price remains well above the 50-day ($31.71) and 200-day ($29.79) moving averages, showing a sustained bullish trend. MACD at 4.80 confirms positive momentum over the past quarter. The stock is currently testing support near $46.30 and facing resistance at $48.28, with a stop-loss identified at $44.92. The average true range (ATR) of $7.17 suggests elevated volatility.

For June 16, 2025, the technical setup implies a possible short-term rebound or stabilization near the $46.30 support level, given the oversold reaction after the steep drop. Over the coming week, if the price breaks the resistance level at $48.28, a retest of $49.73 (intraday high before the drop) is plausible. However, failure to maintain support could see the stock retesting the $44.92 stop-loss level.

Fundamental Analysis

Nebius Group’s trailing twelve months earnings per share (EPS) stand at -$1.65, with a negative price-to-earnings ratio of -28.56, indicating ongoing unprofitability and heavy investment in growth initiatives. The market capitalization is approximately $11.22 billion, placing NBIS solidly in the mid-cap range. The discounted cash flow (DCF) ratio near 0.11 signals the stock might be overvalued relative to its intrinsic cash generation capacity, highlighting significant growth expectations priced in by the market.

Recent news underscores aggressive capital expenditure with a $2 billion 2025 budget focused on scaling AI infrastructure globally, particularly in Europe, leveraging partnerships and NVIDIA’s latest GB200 Blackwell technology. This strategic investment positions Nebius as a strong player in sovereign and enterprise AI cloud solutions, fueling potential long-term revenue expansion despite current losses. The company's expansion into enterprise-grade AI/ML infrastructure with Saturn Cloud and its lead in NVIDIA-powered AI cloud technologies reinforce a competitive moat in a high-growth sector.

Analyst consensus from three covering entities aligns as a 'Buy' with a median price target of $46, close to the current price, signaling limited near-term upside from current levels but confidence in longer-term value creation.

Intrinsic Value and Long-Term Potential

Nebius’s intrinsic valuation likely remains suppressed due to significant upfront investments and losses typical for AI infrastructure growth companies. The low DCF multiple implies the market expects substantial cash flow growth in the future, which hinges on successful commercialization of AI cloud services and scale efficiency. If Nebius can capitalize on emerging AI adoption trends, especially in Europe with regulatory focus on data sovereignty, the firm could justify a premium valuation driven by durable competitive advantages and expanding enterprise customer base.

Over a multi-year horizon, the combination of differentiated technology, solid NVIDIA partnerships, and strategic expansion suggests durable growth potential, though investors must accept elevated near-term volatility and execution risk. Margins may face pressure until CapEx investments mature into stable, recurring revenue streams.

Overall Evaluation

NBIS qualifies as a 'Hold' candidate near-term given the recent steep pullback, overextension in the context of volatility, and the proximity of consensus price targets to current valuations. The stock is technically correcting after rapid appreciation but remains fundamentally aligned with growth narratives. The negative earnings and low intrinsic valuation caution against aggressive accumulation here, yet the structural market position and long-term opportunity merit retention for investors with a growth orientation and risk tolerance. Future price appreciation beyond current levels will depend on execution of AI infrastructure rollouts and progress toward profitability.