Nebius Group Pulls Back 9% After a Downgrade Despite Strong Earnings

Summary

Nebius Group Today$190.07 -9.79 (-4.90%) As of 11:24 AM Eastern This is a fair market value price provided by Massive. Learn more.52-Week Range$34.72▼$233.73P/E Ratio61.75Price Target$182.75 Nebius Group NASDAQ: NBIS delivered an impressive earnings report on May 14, reporting revenue of $399 million, up 684% year over year. The company also reiterated its 2026 revenue guidance of $3 billion to $3.4 billion and raised its contracted power guidance to over 4 gigawatts by year-end. It broke ground on its first U.S. gigawatt-scale AI factory. And a wave of analyst price target increases followed, with Citigroup raising its target from $169 to $287 and Citizens Jmp raising its target to $270. And yet, on Monday, the stock fell almost 9%. For investors who have followed the Nebius story, the question is a natural one: Is this something to worry about, or is it simply the price of admission on one of the market's most high-velocity growth stocks?Get Nebius Group alerts:Sign Up What Triggered the MoveThe primary catalyst for Monday's selloff was a downgrade from DA Davidson, which moved the stock from Buy to Neutral. The timing is notable. DA Davidson had raised its price target from $200 to $250 following the earnings report last week, reflecting genuine conviction in the fundamental story. A deterioration in the business did not drive the downgrade to Neutral just days later; instead, valuation did. After a surge of close to 30% in the days following earnings, the stock ran well ahead of even the most recently raised price targets. DA Davidson's move was a signal that, at current prices, the risk-reward had become more balanced, not that the thesis had changed. Broader sector weakness among AI and neocloud names added to the pressure on Monday. CoreWeave NASDAQ: CRWV, which DA Davidson also moved to Neutral at the same time, saw a similar market reaction. The Earnings Themselves Were ExceptionalIt is worth separating the stock's short-term price action from the underlyin...