Nebius Stock Surges 49% in a Month: Should You Hold or Offload?

Nebius Group N.V. NBIS is currently trading at $135.46, close to its 52-week high of $141.10.  The stock has gained 48.9% in the past month, outperforming the Zacks Computer & Technology sector and the Zacks Internet Software Services industry’s growth of 1.8% and 1.1%, respectively. The S&P 500 Composite is up 0.4% over the same time frame.Image Source: Zacks Investment ResearchTrading above its 50-day and 100-day moving averages, Nebius’ stock signals a continued bullish trend. Image Source: Zacks Investment ResearchGiven the continuous strength in NBIS shares, investors might be tempted to buy the stock. But is this the right time to buy NBIS? Let’s find out.Nebius’ Success DriverLike other leading players such as Microsoft Corporation MSFT and CoreWeave, Inc. CRWV, Nebius has significantly benefited from robust artificial intelligence (AI) infrastructure growth. On the last earnings call, the company reported that its revenues more than doubled from the first quarter, and it became EBITDA positive in its core AI infrastructure business ahead of projections.In 2025, AI infrastructure demand has skyrocketed, fueled by the rapid adoption of generative AI, machine learning and high-performance computing. In the second quarter, NBIS revenues surged 625% year over year to $105.1 million. AI cloud infrastructure revenues grew more than nine times year over year, driven by demand for copper GPUs and near-peak GPU utilization. By the end of 2025, the company expects to secure 220 megawatts of connected power, either active or ready for GPU deployment. Nebius is on track to secure more than 1 gigawatt of power by the end of 2026.Recently, the company closed a deal with Microsoft for $17.4 billion, which involves NBIS providing dedicated GPU capacity to the latter from the new data center in Vineland, NJ, beginning later this year through 2031. Under the deal, Microsoft may also buy additional services or capacity, potentially increasing the total value to about $19.4 billion.Nebius has upgraded its cloud software to support growing capacity and large-scale clusters, expanded its customer base with major tech firms like Cloudflare, Prosus and Shopify, and maintained its lead as the go-to cloud provider for native AI startups. AI compute demand is growing fast, and the company is expanding capacity to drive growth in 2026 and beyond.Apart from these, the company is focusing on building a global footprint, with capacity in the United States, Europe and the Middle East. The company’s partnership with NVIDIA Corporation NVDA bodes well.  In June, Nebius launched NVIDIA GB200 capacity in Europe and deployed Blackwell Ultra GPUs in the U.K. NVIDIA is benefiting from the strong growth of AI and high-performance accelerated computing. NVIDIA’s Hopper 200 and Blackwell GPUs are designed for training and inference of large language models, recommendation engines and generative AI applications.With Blackwell GPUs entering the market at scale and data center capacity ramping up significantly, Nebius expects a sharp increase in sales by year-end. Driven by these factors, Nebius has updated its year-end annualized run rate (ARR) guidance from the previous $700 million–$1 billion range to a new $900 million–$1.1 billion range. For group revenue, the company has reaffirmed its previous guidance of $450 million to $630 million.Is Nebius’ Path Free of Challenges?Despite the tailwinds, broader macroeconomic uncertainties, heavy capital spending and execution risks weigh on NBIS’ growth trajectory. Also, the company faces tremendous competition in the AI cloud infrastructure space. Besides incumbents, NBIS faces intense rivalry from CoreWeave, an AI-focused hyperscaler company. With more than 900 MW of active power targeted by year-end, CRWV is positioning itself as a top-tier provider capable of meeting the needs of large-scale AI training and inference workloads.Moreover, though Nebius holds a strong market position, the current high valuation presents a risk. The stock is trading at a forward 12-month P/S ratio of 20.42, which exceeds the industry average of 4.73.Image Source: Zacks Investment ResearchShould You Cash Out or Hold Nebius Stock?Nebius’ fundamentals appear to be improving rapidly, and the validation from Microsoft could open the door to more large-scale partnerships.However, the stock’s sharp rise has pushed its valuation to stretched levels. The company is still in an aggressive expansion phase, with heavy capital requirements and thin profit margins. There are also execution risks from scaling operations to maintaining efficiency across global data centers.All said, new investors should take the current high valuation into account before investing, whereas existing holders should maintain their position in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Nebius Group N.V. (NBIS): Free Stock Analysis Report CoreWeave Inc. (CRWV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks