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The massive underperformance of this artificial intelligence (AI) infrastructure services and solutions provider in such a short period raises the question: whether investors should take the risk of staying invested or exit NBIS stock.
NBIS One-Month Price Performance Chart
Image Source: Zacks Investment Research
Reason Behind Nebius Group’s Underperformance
Nebius Group's recent underperformance is largely attributed to the divestment of its stake in Yandex at a heavily discounted price. In an effort to depoliticize its business and distance itself from Russia, Nebius Group sold its Russian operations for RUB 475 billion ($5.2 billion), representing a 50% discount to the fair market value of the assets.
NBIS also lost its high-margin businesses, including Search, Advertising, Mobility, E-commerce, Food Delivery, and Cloud Services, to the divestment, retaining only its international AI and cloud-focused division. Its business, which was once profitable, has been reporting loss for the past two quarters since the disinvestment of Yandex in August 2024.
Nebius Group’s net loss widened sequentially to $136.6 million in its fourth-quarter 2024 results, released in February 2025, from a loss of $94.2 million in the third-quarter report on Oct. 31. Since then, investors have remained cautious about the company's early stage of development and its limited experience operating on a standalone basis bringing its stock down in the past month.
Furthermore, NBIS’ bottom-line estimates for 2025 have been widened by 20 cents to a loss of $1 per share in the past 30 days, reflecting near-term pessimism for the stock among analysts.
Image Source: Zacks Investment Research
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Nebius Group Faces Operational Challenges
Since Nebius Group’s business heavily relies on the AI infrastructure services and solutions market, it faces distinct challenges unique to this segment. One major headwind is the extended lead time for customer deals, as organizations require prolonged proof-of-concept testing and complex contract negotiation processes before making any commitment.
Stretched deal cycles create uncertainty in revenue flow and make it difficult for NBIS to swiftly onboard new clients to replace completed engagements. As a result, this delay can contribute to customer churn, impacting overall business stability.
Furthermore, the AI market's reliance on semiconductors exposes Nebius Group to significant regulatory risks. Potential U.S. tariffs on the EU could disrupt supply chains, increase costs and limit access to critical hardware components, raising the capital expenditure of the company.
Competitive Challenges Hurts Nebius Prospect
Nebius Group’s AI-centric cloud platforms and infrastructure compete with established cloud service providers, including Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) , which specialize in cloud-based offerings encompassing AI and machine learning (ML) services.
Amazon, through its Amazon Web Services, provides AI ecosystems like Amazon Bedrock and SageMaker for machine learning, model training and deployment. Alphabet has distinguished itself in the field of AI-centric cloud with deep learning optimization. Alphabet’s popular solutions, including Google DeepMind, Gemini AI and Vertex AI, compete with Nebius Group.
Unlike Nebius Group, which depends on GPU providers like NVIDIA, Alphabet designs and produces Tensor Processing Units for its use in AI and ML workloads. Microsoft already has a global-scale AI cloud, whereas NBIS is still expanding its infrastructure. Additionally, Microsoft’s exclusive partnership with OpenAI gives Azure cloud the priority to access, leading AI models like GPT-4 Turbo, DALL·E and Whisper.
As these players compete to gain a larger market share, companies like Amazon, Alphabet and Microsoft will particularly benefit from the large capital they have. Their deeper financial resources ensure longer research and development cycles, whereas smaller companies like Nebius Group will face constant uncertainty.
Key Technical Indicator Signals Bearish Trend for NBIS
Nebius Group’s technical indicators suggest that further downside could be ahead. The stock has been trading below the 50-day moving average, a key technical level often used by traders to gauge short-term momentum. NBIS’ negative technical indicators suggest that NBIS may face more volatility in the near term.
50-Day Moving Averages Signal Bearish Trend
Image Source: Zacks Investment Research
Conclusion: Sell NBIS Stock Now
Although Nebius Group has distanced itself from the geopolitical challenges arising from its association with Russia, the company is grappling with operational and competitive pressures. Furthermore, NBIS’ weak financials have not alleviated investors’ concerns.
Image: Bigstock
NBIS Stock Plunges 25% in a Month: Is it Time to Book Loss?
Nebius Group N.V. (NBIS - Free Report) shares have plunged 24.6% in the past month, underperforming the broader Zacks Computer & Technology sector, the Zacks Internet - Software and Services industry and the S&P 500 index’s decline of 1.3%, 2.2% and 1.4%, respectively.
The massive underperformance of this artificial intelligence (AI) infrastructure services and solutions provider in such a short period raises the question: whether investors should take the risk of staying invested or exit NBIS stock.
NBIS One-Month Price Performance Chart
Image Source: Zacks Investment Research
Reason Behind Nebius Group’s Underperformance
Nebius Group's recent underperformance is largely attributed to the divestment of its stake in Yandex at a heavily discounted price. In an effort to depoliticize its business and distance itself from Russia, Nebius Group sold its Russian operations for RUB 475 billion ($5.2 billion), representing a 50% discount to the fair market value of the assets.
NBIS also lost its high-margin businesses, including Search, Advertising, Mobility, E-commerce, Food Delivery, and Cloud Services, to the divestment, retaining only its international AI and cloud-focused division. Its business, which was once profitable, has been reporting loss for the past two quarters since the disinvestment of Yandex in August 2024.
Nebius Group’s net loss widened sequentially to $136.6 million in its fourth-quarter 2024 results, released in February 2025, from a loss of $94.2 million in the third-quarter report on Oct. 31. Since then, investors have remained cautious about the company's early stage of development and its limited experience operating on a standalone basis bringing its stock down in the past month.
Furthermore, NBIS’ bottom-line estimates for 2025 have been widened by 20 cents to a loss of $1 per share in the past 30 days, reflecting near-term pessimism for the stock among analysts.
Image Source: Zacks Investment Research
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Nebius Group Faces Operational Challenges
Since Nebius Group’s business heavily relies on the AI infrastructure services and solutions market, it faces distinct challenges unique to this segment. One major headwind is the extended lead time for customer deals, as organizations require prolonged proof-of-concept testing and complex contract negotiation processes before making any commitment.
Stretched deal cycles create uncertainty in revenue flow and make it difficult for NBIS to swiftly onboard new clients to replace completed engagements. As a result, this delay can contribute to customer churn, impacting overall business stability.
Furthermore, the AI market's reliance on semiconductors exposes Nebius Group to significant regulatory risks. Potential U.S. tariffs on the EU could disrupt supply chains, increase costs and limit access to critical hardware components, raising the capital expenditure of the company.
Competitive Challenges Hurts Nebius Prospect
Nebius Group’s AI-centric cloud platforms and infrastructure compete with established cloud service providers, including Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) , which specialize in cloud-based offerings encompassing AI and machine learning (ML) services.
Amazon, through its Amazon Web Services, provides AI ecosystems like Amazon Bedrock and SageMaker for machine learning, model training and deployment. Alphabet has distinguished itself in the field of AI-centric cloud with deep learning optimization. Alphabet’s popular solutions, including Google DeepMind, Gemini AI and Vertex AI, compete with Nebius Group.
Unlike Nebius Group, which depends on GPU providers like NVIDIA, Alphabet designs and produces Tensor Processing Units for its use in AI and ML workloads. Microsoft already has a global-scale AI cloud, whereas NBIS is still expanding its infrastructure. Additionally, Microsoft’s exclusive partnership with OpenAI gives Azure cloud the priority to access, leading AI models like GPT-4 Turbo, DALL·E and Whisper.
As these players compete to gain a larger market share, companies like Amazon, Alphabet and Microsoft will particularly benefit from the large capital they have. Their deeper financial resources ensure longer research and development cycles, whereas smaller companies like Nebius Group will face constant uncertainty.
Key Technical Indicator Signals Bearish Trend for NBIS
Nebius Group’s technical indicators suggest that further downside could be ahead. The stock has been trading below the 50-day moving average, a key technical level often used by traders to gauge short-term momentum. NBIS’ negative technical indicators suggest that NBIS may face more volatility in the near term.
50-Day Moving Averages Signal Bearish Trend
Image Source: Zacks Investment Research
Conclusion: Sell NBIS Stock Now
Although Nebius Group has distanced itself from the geopolitical challenges arising from its association with Russia, the company is grappling with operational and competitive pressures. Furthermore, NBIS’ weak financials have not alleviated investors’ concerns.
Considering all these factors, we suggest that investors should stay away from this Zacks Rank #4 (Sell) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.