Down 20%, Should You Buy Nebius Group Right Now?

Core Viewpoint - Nebius Group's stock has experienced significant volatility, with a year-to-date gain of over 300%, but it has recently declined nearly 20% from its all-time high, raising concerns about a potential AI bubble [2][12] Company Overview - Nebius Group, previously part of Yandex N.V., has transformed into a cloud infrastructure provider specializing in AI technology data centers after divesting its Russian assets [4][5] - The company operates a full-stack AI cloud platform utilizing thousands of Nvidia GPUs, and recently launched a new data center in Israel featuring Nvidia's Blackwell chips [6] Financial Performance - Nebius reported a net loss of $91.5 million in Q2, despite revenue of $105.1 million, which represents a 625% increase year-over-year [12] - The company has raised significant capital through various offerings, including a $2 billion private offering of convertible senior notes and a $1 billion public offering of common stock, to support its expansion plans [10][11] Strategic Partnerships - A major five-year agreement with Microsoft, valued at up to $19.4 billion, will provide dedicated GPU capacity to Microsoft's Azure, significantly enhancing Nebius's revenue potential [8] Growth Projections - Nebius aims to secure 1 gigawatt of cloud computing capacity by 2026, equivalent to the output of a nuclear reactor, with current usage at approximately 220 megawatts [9] - The company has increased its annual run rate revenue forecast for the end of this year to a range of $900 million to $1.1 billion, up from a previous estimate of $750 million to $1 billion [12] Market Sentiment - Analysts have a consensus 12-month price target of $156.40 for Nebius stock, indicating a potential upside of about 40% from current trading levels [14]