Here’s why Nebius stock is soaring today and what to expect next

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Nebius stock surged by over 10% today, September 8, continuing a recovery that started on Tuesday last week when it bottomed at $194.76. It jumped to a high of $250, its highest level since August 18 this year, mirroring the performance of other neocloud companies like CoreWeave and IREN. 

Nebius Group stock jumps after Palantir partnership

NBIS stock went parabolic after the company announced a major partnership with Palantir, one of the biggest software players in the industry. 

In a statement, Palantir said that it will use Nebius as its preferred sovereign AI infrastructure partner. As part of this deal, Palantir will bring Nebius compute and inference endpoints inside Palantir enterprise perimeter. 

This means that Palantir customers will have access to Nebius’s cloud and inference infrastructure. Alex Karp, Palantir’s CEO, said

“Nebius’ compute infrastructure powers your ability to run your own AI models under conditions you control. Our ontology and their infrastructure will undergird the sovereignty our partners are demanding.”

Palantir joins a long list of customers who are using Nebius services. Some of the most notable ones are Microsoft, Meta Platforms, Cloudflare, and Revolut. Its demand is so high such that the management insisted that it was fully sold out for the year, and that it was in a position to sell its 2027 capacity today. 

READ MORE: Michael Burry shorts Nebius stock: Is it a buy or sell before earnings?

Nebius growth is continuing

The most recent results showed that Nebius Group’s revenue growth continues growing, with the management expecting it to keep growing. Its revenue surged by 454% in the second quarter to $582 million, with its six-month figure rising to $981 million.

The challenge, however, is that this growth is coming at a cost. For example, its depreciation and amortization rose from $75 million in the second quarter of last year to over $259 million. This is a big number, which means that its D&A is about 44% of the total revenue. 

The company’s capital expenditure continued growing, reaching over $5.7 billion as it continues to spend. It is funding its spending through borrowing and using customer prepayments. In its statement, the management said that it expected to receive about $9 billion in customer prepayments.

Worse, the company has funded its capital expenditure through share sales. It sold 12.7 million shares through June, raising $2.8 billion in cash. It has about 13 million in outstanding shares that it can sell. This explains why it has a short interest of about 20%.

Nebius stock price technical analysis

NBIS stock chart | Source: TradingView

The daily chart shows that the NBIS stock has soared in the past few days, moving from a low of $194.76 last week to a high of $245. A closer look shows that it has already crossed the 50-day moving average and formed an inverted head-and-shoulders pattern. These technicals are usually high bullish.

Nebius is attempting to move above the Major S/R pivot point of the Murrey Math Lines tool at $250. Therefore, the most likely scenario is where it continues rising, potentially to the strong pivot reverse level of $312. This view will be confirmed if it crosses the resistance at $300.

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