- Nebius stock price soared to a record high after releasing strong numbers.
- The company’s revenue soared after the recent deals with Microsoft and Meta Platforms.
- There are concerns about the rising depreciation.
Nebius stock price surged by over 10% on Wednesday and reached its all-time high of $210, with its market capitalization soaring to over $50 billion. It has now jumped in the last three consecutive weeks and is up by over 1,300% from its lowest level in 2024.
NBIS stock will likely continue rising amid the ongoing AI boom. However, it soaring debt and depreciation are key concerns.
Nebius Stock Jumps as Revenues Soar
The NBIS stock price continued its strong rally after the company published its financial results. As we recently predicted, the company said that its revenue surged to $399 million in the quarter, up sharply from the $50.9 million it made last year.
Most importantly, Nebius said that its adjusted EBITDA moved to positive $129 million from a $53.7 million loss a year earlier. It now expects that its annual revenue will be between $3 billion and $3.4 billion this year, with its ARR ending the year at between $7 billion and $9 billion.
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Nebius’ strong revenue growth was mostly because of the recent partnerships with Microsoft and Meta Platforms, two of the biggest companies in the world. It inked a $19 billion deal with Microsoft last year and a $27 billion partnership with Meta Platforms earlier this year.
These partnerships have made it a duopoly in the neocloud industry, together with CoreWeave, a company currently valued at over $58 billion. NVIDIA recently invested $2 billion in the two companies, and is now the biggest CoreWeave shareholder.
Nebius Still Faces Some Major Challenges, Including Soaring Depreciation
Still, the main challenge for Nebius, which explains why it has a short interest of over 20% is the ongoing capital spending. The company is spending billions of dollars in building its data centers in the United States and other countries like Israel and Finland.
While it ended the quarter with over $9.3 billion in cash and short-term investments, it will spend much more money than this in 2026, a situation that has worsened as GPU and memory chip prices have soared.
The other challenge is that its business is experiencing substantial depreciation. Its financial results showed that its depreciation and amortization jumped by 332% to over $212 million. It was the fastest-growing part of its operating expenses. The management noted:
“The primary driver of the dollar increase in D&A expenses was the continued investments in GPU-related capital expenditures and related data center hardware for the Nebius AI cloud business.”
Additionally, its debt load has continued rising. While its current debt dropped to $18.4 billion, its non-current debt rose to over $8.2 billion.
Still, on the positive side, these challenges will be temporary and are offset by its rapidly growing revenue. Also, it will likely get to a point where the capital spending will start slowing.
NBIS Stock Price Technical Analysis
The ongoing NBIS share price surge is in line with our recent predictions, which you can see here and here.
The daily chart reveals that the stock formed a cup-and-handle pattern, which is a common bullish continuation sign in technical analysis.
It has jumped above all moving averages and the key resistance level at $197, invalidating the forming double-top pattern.
Therefore, the most likely Nebius forecast is highly bullish, with the next key target being at $250. In the near term, however, there is a risk that the stock will give back some of the gains as investors book profits.
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