Nvidia’s Investment Fails to Save Nebius Stock from Decline
Nebius (NBIS) stock dropped on Thursday despite a significant investment from Nvidia (NVDA), which had initially driven the stock price to new heights the day before.
- Nebius, a Netherlands-based internet and technology company, saw its stock rally by nearly 7% on Wednesday, reaching a new all-time high.
- The surge was driven by Nvidia’s announcement of a 1.2 million-share stake in Nebius.
- Nvidia, a key player in the AI industry, has been increasing its investments in AI companies as it expands its partnerships and enhances its leadership in the AI space.
Why Is NBIS Stock Down?
Despite Nvidia’s backing, Nebius shares fell after the company released its latest earnings report, which disappointed investors.
- The company reported an adjusted net loss of $87.5 million, a 3% increase from the $85.3 million loss reported in Q4 2023.
- However, the company did report impressive revenue growth, with revenue reaching $37.9 million, a 466% increase year-over-year.
- This growth was primarily driven by Nebius’ core AI infrastructure business, which surged 602% from Q4 2023.
Shareholder Confidence Takes a Hit
Despite strong revenue growth and Nvidia’s investment, shareholder confidence waned, and the stock dropped 8.68%.
- The heavy trading volume saw over 19 million shares change hands, compared to the three-month daily average of 12.72 million.
- However, NBIS stock is still up 47.8% year-to-date, despite today’s decline.
Is NBIS Stock a Buy, Sell, or Hold?
Regarding Wall Street’s perspective on Nebius stock, only one analyst has weighed in over the past three months.
- Hamed Khorsand, a five-star analyst at BWS Financial, has a Buy rating on Nebius with a $51 price target, indicating a 23.64% upside.
- As Nvidia’s investment gains attention and following the earnings report, more analysts may begin to cover NBIS stock in the coming weeks.
