Nebius Group (NASDAQ: NBIS) reported a staggering 684% year-over-year revenue increase in its latest earnings, reaching $399 million, and reaffirmed its ambitious 2026 revenue guidance of $3 billion to $3.4 billion. Despite this impressive performance and the initiation of a U.S. gigawatt-scale AI factory, the stock saw a nearly 9% drop following a downgrade from DA Davidson, which shifted its rating from Buy to Neutral due to valuation concerns rather than business deterioration.
The downgrade comes after a significant 30% surge in the stock price post-earnings, suggesting that the market may have overextended itself. Analysts have raised their price targets, with Citigroup and Citizens JMP setting new targets of $287 and $270, respectively. However, the consensus price target of $182.75 indicates potential downside, reflecting mixed sentiments among analysts.
For investors, the recent pullback may present a strategic entry point, especially given the stock’s 140% year-to-date gain. As the AI sector experiences consolidation, Nebius Group’s underlying business momentum continues to align with bullish long-term projections.
Source: marketbeat.com