NBIS Retreats After CoreWeave Rally Ahead Of Q3 Report: Analyst Says Market Can’t ‘Squeeze Out’ Top Players Amid Record Cloud Demand

Nebius shares rallied the most in three months on Wednesday following an upbeat quarterly report from peer CoreWeave.

• Nebius will report Q3 results on Thursday, and analysts expect revenue to increase 521% to $907.2 million.
• Majority of the analysts have retained their ‘Buy’ rating on NBIS heading into the company’s report.
• Retail sentiment for NBIS was ‘bullish’ on Wednesday.

Nebius (NBIS) fell 2.3% in overnight trading ahead of Thursday’s session, weighed down by the ongoing disruption at Nvidia following reports of its CEO Jensen Huang’s affairs and the possibility of his ouster.

Investors are watching the move closely as the neocloud operator prepares to publish its third-quarter results, due before the market opens. 

The setup appears bullish: CoreWeave’s (CRWV) strong quarterly update earlier this week triggered a rally in neocloud stocks on Wednesday and eased fears about the durability of the business, which had pressured the sector in recent months.

Nebius shares rose 15.4%, its best single-day gain in three months, while CoreWeave stock rose 25%.

Analysts are upbeat ahead of the report, which would be the last from major neocloud players this quarter and offer a comprehensive view of the space's health.

Analyst Sees Neocloud Sustainability

The Futurum Group CEO Daniel Newman said the top three players, CoreWeave, Nebius and IREN are unlikely to face difficulty despite debt fears and stock pressure.

“$CRWV will not be among the “200 Guppy Level Deaths” for neoclouds. Credit markets can’t squeeze you out if you don’t need them. $IREN and $NBIS fit into this category too,” Newman said in an X post.

“Selling was overdone. Capacity remains scarce, energy even more so. Prices reflect that. Share price will eventually come all the way back and then some.”

Currently, 15 of 22 analysts have a ‘Buy’ or higher rating on NBIS, six rate it ‘Hold’ and one rates it ‘Sell,’ per Koyfin data. Their average price target of $278.05 implies an 80% upside from the stock’s last close.

Nebius’ Q3 Report: Analyst Expectations

Analysts expect Nebius’ Q3 revenue to rise 521% to $907.2 million, as per Koyfin. They expect adjusted loss to be $0.63 per share, up from $0.40 a year ago.

As with its peers, investors will be watching closely for updates on Nebius’ expansion plans – mainly whether they are on track –  alongside its sales and forecasts.

Recently, Iren faced a delay in bringing certain capacity online, which led Microsoft to spend less than it had earmarked last quarter. 

Nebius has been rapidly expanding its AI cloud infrastructure amid strong demand for cloud services. 

The company secured a major long-term cloud contract from Meta Platforms (META) in March. More recently, Nebius announced price increases for selected Nvidia GPU instances and has reportedly hiked prices by around 17% to 21% starting Oct. 1.

Retail View On NBIS 

On Stocktwits, retail sentiment for NVDA improved to ‘bullish’ as of early Thursday, with several traders expecting a strong report from Nebius.

“$NBIS don’t be on the wrong side of this tomorrow. Coreweave was a glimpse,” said a trader. Another wrote: “$NBIS anyone selling after hours is going to really regret it tomorrow.”

As of the last close, NBIS stock is up 85% year to date.

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