Adding Nebius to My Watchlist After $27 Billion Meta Announcement
Here's a trade idea involving the Dutch AI-focused firm after some news turned heads on Wall Street.
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Key Speakers at the Raise Summit
The news? Meta Platforms (META) has signed a deal to spend up to $27 billion on AI-related infrastructure to be provided by Nebius Group (NBIS) .
Under the terms of the deal, Nebius will provide $12 billion worth of dedicated compute capacity across a number of locations to Meta Platforms in what will be one of the first large scale deployments of Nvidia's (NVDA) latest Rubin architecture AI chips. In addition, Meta Platforms has also committed to purchase $15 billion worth of additional capacity from Nebius over the next five years.
In November of last year, Meta had signed a $3 billion deal with Nebius. This is a huge expansion of that relationship. Readers may recall that last Wednesday, Nvidia announced a $2 billion investment in Nebius, and Nebius announced the intention to deploy more than 5 gigawatts of Nvidia systems by the end of the year 2030. Interestingly, Nvidia also announced a $2 billion investment in Nebius rival CoreWeave (CRWV) in January to help that firm build out more than 5 gigawatts worth of "AI factories" by the year 2030. CoreWeave will also integrate the Rubin GPUs into its platforms this year.
Who Is Nebius?
Nebius Group is an Amsterdam-based technology, now AI-focused, infrastructure company. The firm offers products and services, primarily a cloud platform meant to handle AI-related workloads. The firm builds full-stack infrastructures including GPU clusters as well as offerings of tools for developers.
For those who may be wondering, this is the company formerly known as "Yandex." The firm was rebranded in the summer of 2024. Nebius had already been operating in Europe, North America and Israel and has now expanded into Japan and the Asia-Pacific region. Nebius operates several tech-based subsidiaries that offer technology for autonomous driving, technology-focused, developer targeting tools, and re-education for individuals.
Wall Street
- On Wednesday, Alexander Duval of Goldman Sachs, who is rated at 4.5 stars (out of five) by TipRanks, reiterated his "Buy" rating on NBIS and his $160 target price
- On Thursday, Nehal Chokski of Northland Securities, who is rated at five stars by Tip Ranks, reiterated his "Buy" rating on NBIS and his $232 target price
- On Monday morning, Tyler Radke of Citigroup, who is rated at slightly more than three stars by TipRanks, initiated NBIS with a "Buy" rating and a $169 target price
Earnings
Nebius is set to report next in late April. For its first quarter, Wall Street is looking for a GAAP EPS of -$0.63 versus -$0.39 for the year-ago comparison. That said, with expectations for revenue of more than $401 million, that will run at more than seven-fold the $55.3 million in sales reported for Q1 2025.
The Chart
Readers will note that from late 2025 into the present, NBIS developed a double-bottom pattern of bullish reversal with a $110 pivot. As the stock has approached that pivot and now broken out, it has left two unfilled gaps in its wake.
We know that unfilled gaps often eventually fill. We also see that the double-bottom found support at the 50% retracement level or "halfway back" point of the late 2024 into October 2025 rally. That was real support right there.
This is what I think might happen:
The stock still loses money, so we need to trade technically and understand that this stock is still a speculative play in nature. Should the stock start to sell off in order to go back and fill one or even both of those gaps, my double bottom will start to look more like a cup pattern that is adding a handle. That would put the upside pivot at the right side of the cup and create room for considerably higher prices.
But this move? Do what you want, but I'm not making it.
I would, however, be very interested in initiating on weakness should that a handle be added that at least approaches the $116 level to fill gap number one (or two chronologically). A trader could probably write $116 puts expiring on May 1 for about $9 a pop. That might be a better idea. Just thinking out loud, but I think this one goes on my watchlist for now, with an interest to take down an equity stake when it smells right.
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At the time of publication, Guilfoyle was long NVDA equity.
