Nebius Group N.V. (NBIS) just can't catch a break. After dropping 17% on July 1, the stock fell another 13% on Thursday and kept sliding in Friday's premarket. The culprit? The same worry that's been haunting the company for weeks: Meta Platforms Inc. (META) might start renting out its massive hoard of AI computing power, flooding the market and squeezing everyone else's pricing.
It's a classic case of "too much of a good thing." Meta has been building out AI infrastructure at a furious pace, and analysts figure it could sell excess capacity to external customers. Evercore ISI's Mark Mahaney estimates that could bring in $10 billion to $20 billion a year for Meta. For Nebius and other AI cloud providers, that's a scary thought — more supply usually means lower prices.
But here's the thing: Nebius isn't sitting still. The company recently unveiled an asset-light model where partners finance and operate data centers while Nebius provides the AI cloud platform and software. That could let it scale capacity quickly without burning through cash. And it just locked in a contract worth over $1 billion to provide Reflection AI with computing capacity through 2029, including access to Nvidia Corp.'s (NVDA) GB300 chips.
So why is the stock getting hammered? Short-term fears are overpowering long-term fundamentals. Let's look at the technical picture.
Technical Check: Painful Pullback, But Long-Term Trend Intact
Nebius closed Thursday at $167.05, which is a sharp drop from recent highs. The stock is now trading:
- 28.9% below its 20-day moving average of $235.08
- 25.7% below its 50-day moving average of $224.80
- 4% below its 100-day moving average of $174.01
- 21.5% above its 200-day moving average of $137.52
That last number is key. Staying above the 200-day average keeps the longer-term trend constructive. But the stock is below all the shorter-term averages, and the MACD is bearish, which means near-term pressure is likely to continue.
Resistance sits around $173.27 to $174.01, then $224.80 to $235.08. Support is near the 200-day SMA at $137.52. If the stock holds that level, the bull case stays alive.
And despite the violent pullback, Nebius is still one of the market's top performers this year, up 219.93% year-to-date. That's not a typo.
Earnings Preview: Big Revenue Jump Expected
Nebius is expected to report earnings on August 6, 2026. Analysts are looking for a loss of 73 cents per share, wider than last year's 38-cent loss. But revenue is projected to surge from $105.10 million to $576.67 million — a sign that the business is scaling fast.
Wall Street is still bullish overall. The stock has a consensus Buy rating from 17 analysts, with an average price target of $213.89. Recent analyst moves include:
- B of A Securities: Buy, raised target to $280.00 (June 8)
- BNP Paribas: Initiated with Neutral, target $255.00 (June 2)
- DA Davidson: Neutral, target $250.00 (May 18)
So even with the recent selloff, analysts see significant upside from current levels.
The Bottom Line
Nebius is caught in a tug-of-war between near-term fear about Meta's potential move into the AI compute rental market and its own strong growth story. The $1 billion deal, the asset-light strategy, and the massive revenue growth expected this year are real positives. But until the "Meta Compute overhang" clears, the stock could stay volatile.
In Friday's premarket, Nebius shares were trading 1.90% lower at $168.50. The next big catalyst will likely be the earnings report on August 6 — and whether Meta actually follows through on its rental plans.
