Core Viewpoint - Nebius Group N.V. (NBIS) has experienced a significant decline in its stock price, dropping 24.6% over the past month, which is a stark contrast to the minor declines in the broader market indices [1][3]. Group 1: Reasons for Underperformance - The primary reason for Nebius Group's underperformance is the divestment of its stake in Yandex at a heavily discounted price of RUB 475 billion (136.6 million in Q4 2024, up from a loss of 1 per share, reflecting a pessimistic outlook [6]. - Current estimates for the upcoming quarters indicate a loss of 0.41 for Q1 2025, with the full-year loss for 2024 projected at $1.10 [7]. Group 3: Operational Challenges - Nebius Group faces operational challenges due to the extended lead times for customer deals, which require prolonged proof-of-concept testing and complex contract negotiations [8]. - The reliance on semiconductors in the AI market exposes the company to regulatory risks, including potential U.S. tariffs on the EU, which could disrupt supply chains and increase costs [9]. Group 4: Competitive Landscape - Nebius Group competes with established cloud service providers like Amazon, Microsoft, and Alphabet, which have more robust financial resources and established AI-centric cloud platforms [10][13]. - Unlike Nebius Group, these competitors have developed their own hardware solutions, such as Alphabet's Tensor Processing Units, giving them a competitive edge in AI and machine learning services [12]. Group 5: Technical Indicators - Technical indicators for Nebius Group suggest a bearish trend, with the stock trading below the 50-day moving average, indicating potential further downside [14]. Group 6: Conclusion - Given the operational and competitive pressures, along with weak financials, it is suggested that investors should avoid Nebius Group stock at this time [16].
NBIS Stock Plunges 25% in a Month: Is it Time to Book Loss?