Nebius Group (NBIS) Surges 5.6% on Landmark Microsoft Pact and Analyst Hype: Is This the Start of a New Bull Run?

Summary
• Nebius Group (NBIS) surges 5.6% to $94.50, hitting a fresh 52-week high amid a $17.4B Microsoft AI infrastructure deal.
• Analysts at BWS Financial and DA Davidson upgrade price targets, with BWS setting a $130 target (39% upside).
• The stock trades at a 212% YTD gain, far outpacing the 30.7% rise in its sector.

Nebius Group’s shares are in a frenzy as the AI cloud infrastructure provider secures a transformative $17.4B contract with Microsoft. The stock’s 5.6% intraday jump to $94.50—up from a $91.10 low—reflects renewed investor confidence in AI-driven demand. With a $3.7B capital raise and analyst upgrades fueling momentum, the question now is whether this rally is sustainable or a flash in the pan.

Microsoft Mega Deal and Analyst Hype Ignite Rally
Nebius Group’s 5.6% surge is directly tied to its landmark $17.4B AI infrastructure agreement with Microsoft, which provides stable revenue through 2031. The deal, coupled with a $3B contract with Meta, validates Nebius’s full-stack AI platform and accelerates its path to $7B–$9B in annualized revenue by 2026. Analysts at BWS Financial and DA Davidson have reinforced bullish sentiment, with BWS raising its price target to $130 and DA Davidson reaffirming a Buy rating. Additionally, the stock’s 43.8% premarket surge following an analyst upgrade highlights the market’s eagerness to capitalize on AI infrastructure tailwinds.

Data Processing & Outsourced Services Sector Gains Momentum as CoreWeave (CRWV) Rises 2.88%
Nebius’s rally aligns with broader strength in the Data Processing & Outsourced Services sector, where CoreWeave (CRWV) climbed 2.88% on news of a $55.6B revenue backlog and strategic partnerships with NVIDIA. Alphabet (GOOGL) also benefits from AI infrastructure expansion, including next-gen GPU rollouts. While Nebius’s focus on hyperscaler contracts differentiates it, the sector’s collective optimism underscores AI’s structural demand. However, Nebius’s reliance on Microsoft and Meta exposes it to customer concentration risks, unlike CoreWeave’s diversified client base.

Options Playbook: Leverage Gamma and Theta for High-Volatility Gains
• Technical Indicators: 200-day MA: $65.21 (far below), RSI: 40.68 (oversold), MACD: -5.04 (bearish), Bollinger Bands: $75.41–$107.33 (wide range).
• Key Levels: Immediate support at $91.10 (intraday low), resistance at $95.90 (intraday high).
• Options Focus: High-gamma, high-liquidity contracts with moderate deltas offer optimal leverage for a continuation of the rally.

Top Options:
• NBIS20251226C95 (Call, $95 strike, 12/26 expiry):
- IV: 69.50% (mid-range), Leverage: 37.50%, Delta: 0.454, Theta: -0.6357, Gamma: 0.051968, Turnover: 690,495.
- Why: High gamma ensures sensitivity to price swings; moderate delta balances directional risk. A 5% upside to $99.23 would yield a payoff of $4.23 per contract, or 44.12% gain.
• NBIS20251226C96 (Call, $96 strike, 12/26 expiry):
- IV: 68.25%, Leverage: 45.73%, Delta: 0.401, Theta: -0.5856, Gamma: 0.051636, Turnover: 177,545.
- Why: Strong liquidity and high leverage make this ideal for aggressive bulls. A 5% move to $99.23 would generate a $3.23 payoff, or 46.43% gain.

Action: Aggressive bulls should target NBIS20251226C95 into a break above $95.90. Conservative traders may use NBIS20251226C96 as a hedge against volatility. Watch for a breakdown below $91.10 to trigger short-term puts.

Backtest Nebius Group Stock Performance
The backtest of NBIS's performance following a 6% intraday increase from 2022 to the present shows favorable results. The 3-Day win rate is 54.97%, the 10-Day win rate is 58.28%, and the 30-Day win rate is 63.58%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 35.62% over 30 days, suggesting that NBIS can deliver significant gains even after the initial 6% surge.

Bullish Momentum Unlikely to Fade—But Caution Remains Key
Nebius Group’s rally is underpinned by structural AI demand and a robust capital raise, but its overvalued multiples and customer concentration risks demand caution. The stock’s 5.6% surge reflects optimism in its Microsoft and Meta contracts, yet its Zacks Rank 4 (Sell) and F Value Score highlight valuation concerns. CoreWeave (CRWV)’s 2.88% rise signals sector-wide strength, but Nebius’s reliance on two hyperscalers could amplify downside risks. Act Now: Buy NBIS20251226C95 if $95.90 holds; exit if $91.10 breaks. Monitor Microsoft’s Q3 earnings and data-center deployment timelines for near-term catalysts.