Nebius Group stock has slumped sharply this month, a trend that intensified this week as investors reacted to the ongoing AI safety fears. NBIS fell to $209, down by over 30% from its highest level this year. So, is this sell-off a good buying opportunity?
Nebius Group stock has come under intense pressure
NBIS and other AI companies have plunged this week as investors remain worried about the industry and its unprecedented growth. This growth has pushed senior executives, including Dario Amodei, Sam Altman, and Elon Musk, to call for a slowdown in the sector.
They are also calling for a global coordination to set guardrails. These fears escalated after an Anthropic researcher warned that, left unchecked, the growth may lead to human extinction in the next few years. Anthropic also reported that it had identified biological research using its Claude platform.
Therefore, investors have dumped top companies in the industry, fearing that the slowdown will have a negative impact on their businesses. Neocloud companies like Nebius, CoreWeave, and IREN have been among the most affected.
However, a closer look at the fear shows that the panic is not all that justified. For one, chances are that AI companies will continue spending billions of dollars in data centers and computing ability because of the growing competition.
A good example of this is OpenAI and Anthropic. While OpenAI was the pioneer in the industry, Anthropic’s innovation has surpassed it in many metrics. OpenAI is now raising cash at a $1.2 trillion valuation, while Anthropic is set to go public at a $2 trillion valuation.
NBIS is growing at a rapid rate
Nebius’ business is growing at an unprecedented rate. Its last earnings report showed that its revenue soared by 454% in the last quarter to $582 million, with its six-month figure hitting $981 million. The company also made an adjusted EBITDA of $236 million, an increase from the $21 million loss it made last year.
Analysts expect that Nebius Group’s revenue will continue soaring as demand for computing capacity rises. The annual revenue is expected to surge by 531% to $3.34 billion, followed by $12 billion next year. Chances are that the revenue figures will be higher than these estimates.
To be fair, Nebius Group has some major risks, including the rising dilution, cash burn, high valuation, and competition. There is a possibility that the rising growth will help to offset these costs.
Nebius stock technical analysis
NBIS stock chart | Source: TradingView
The daily chart shows that the NBIS stock price has retreated in the past few months. It has dropped from a high of $300 in June to the current $220.
On the positive side, the stock remains above the 50% Fibonacci Retracement level at $187. It also remains above the 100-day Exponential Moving Average (EMA), a positive side.
There are also signs that it has formed an inverted head-and-shoulders pattern, a common bullish reversal sign. It is also slightly above the Strong, Pivot, Reverse level of the Murrey Math Lines. Therefore, the stock will likely bounce back, potentially to the psychological level of $300.
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