Nebius Slides Post-Earnings: A Long-Term Buy Opportunity?

Key Points

• Nebius shares have swung from all-time highs to a 28% drop after its Q4 earnings report, influenced by a market-wide selloff and mixed analyst reactions.
• Q4 2024 revenue soared 466% year-over-year to $37.9 million.
• BWS Financial raised its price target to $60, while Hedgeye reversed its bullish stance, possibly contributing to the sell-off.

It’s been a rollercoaster start to the year for shares of Nebius Group NASDAQ: NBIS. The AI infrastructure stock has seen dramatic swings, hitting new 52-week and all-time highs, only to retreat sharply following its recent earnings report.

As of Monday's close, Nebius shares had slid over 28% from their 52-week high set just the previous week, driven by a combination of a market-wide sell-off and mixed analyst reactions to the company’s Q4 and full-year 2024 financial results. 

With the stock now testing its 50-day SMA, investors might be asking whether this pullback presents a compelling long-term buying opportunity. Let’s dive into the latest catalysts and the road ahead for Nebius.

Revenue Surges, But Profitability Remains a Challenge

On February 20, 2025, Nebius Group N.V. reported its financial results for Q4 and full-year 2024. The numbers were a mixed bag, showcasing impressive revenue growth but continued struggles with profitability. For Q4 2024, Nebius reported revenue of $37.9 million, reflecting a staggering 466% year-over-year increase. The company’s core AI infrastructure segment surged 602% compared to Q4 2023.

Despite this robust top-line growth, Nebius posted an adjusted EBITDA loss of $75.5 million, a modest 7% improvement from the $81.3 million loss in the same quarter the previous year. Net loss from continuing operations climbed to $136.6 million, marking a 55% increase year-over-year. Capital expenditures were also substantial, reaching $417.6 million in Q4 as Nebius continued investing heavily in GPU procurement and data center expansion.

For the full year 2024, revenue came in at $117.5 million, a sharp 462% increase from 2023. The adjusted EBITDA loss totaled $266.4 million, and the net loss from continuing operations stood at $396.9 million. The company ended the year with a solid cash position of $2.4 billion, bolstered by a $700 million funding round in December 2024. 

Looking ahead, Nebius provided ambitious guidance for 2025, projecting an annualized run-rate (ARR) of $220 million by March and scaling to $750 million to $1 billion by December. The company also expects full-year 2025 revenue to land between $500 million and $700 million. While profitability remains elusive, Nebius aims for near-breakeven EBITDA by the end of 2025, supported by plans to expand data center capacity to 100 megawatts, with the potential to scale to over 300 megawatts.

Analyst Sentiment: A Divided Outlook

Nebius’s Q4 earnings report prompted mixed reactions from the small pool of analysts covering the stock. BWS Financial maintained its Buy rating and raised its price target from $51 to $60 on February 21. The firm highlighted Nebius’s strong Q1 guidance and its path to a $1 billion ARR by year-end, emphasizing its growing AI infrastructure capabilities despite recent volatility.

In contrast, Hedgeye Global Technology, once a bullish supporter of Nebius, reversed its stance on February 24, removing its long position. The firm cited "surprising vision misalignment from management" and "light guidance" from the earnings call as reasons for the shift. This unexpected downgrade added to selling pressure, amplifying the post-earnings slide.

Following its earnings, another firm initiated coverage of the company. DA Davidson Analysts initiated stock coverage with a Buy rating and a $50 price target. The firm added the stock within D.A. Davidson’s DaVinci initiative for deep tech businesses, noting that Nebius is “emerging as one of the first true alternatives to hyperscaler-dominated AI compute.”

The contrasting views reflect both the promise and the risks tied to Nebius’s ambitious growth strategy, rapid revenue expansion coupled with the challenge of balancing heavy capital investments and profitability.

The Long-Term Story Remains Intact

Despite the recent pullback, there are compelling reasons to remain optimistic about Nebius’s long-term prospects. Nebius’s core business is well-positioned to benefit from the surging demand for AI infrastructure, especially as companies continue ramping up AI deployments. The company also enjoys solid institutional backing, with NVIDIA’s stake and positions from Soros Capital, Marshall Wace, and Columbus Hill reflecting strong confidence in its future. 

Robust guidance pointing to a $1 billion ARR target by year-end signals Nebius’s intent to scale aggressively. Furthermore, a key upcoming catalyst is NVIDIA’s earnings report this Wednesday. As a significant AI chip supplier, market leader, and shareholder in Nebius, NVIDIA’s outlook could offer critical insights into the overall health of the AI sector and potential tailwinds for Nebius.