Nebius Group Plummets 4.7% as Earnings Loom: Is This the Setup for a Rebound?

Summary
• Nebius Group (NBIS) drops 4.7% to $51.85 amid pre-earnings jitters and sector volatility.
• Management raised 2025 capex to $2B and targets $1B in annualized revenue by year-end.
• July 31 saw a 6.12% surge on AI infrastructure momentum, but August 7 earnings could test resolve.

As Nebius Group approaches its August 7 earnings report, the stock is trading at a 9% discount from its 52-week high of $58.16. The selloff follows a volatile session where the stock traded as low as $50.0982, reflecting investor uncertainty ahead of key guidance and competition from cloud giants like Oracle. With AI infrastructure spending surging across hyperscalers, the market is weighing Nebius' ability to maintain its growth trajectory.

Earnings Anticipation and Competitive Pressures Fuel Volatility
Nebius Group's 4.7% decline reflects growing investor caution ahead of its August 7 earnings report. The stock has been pressured by two key factors: 1) uncertainty around whether the company will maintain its aggressive $750M-$1B annualized revenue guidance, and 2) intensifying competition from cloud infrastructure rivals like Oracle, which recently secured a $30B deal. Despite April's ARR hitting $310M, market participants are scrutinizing whether Nebius can sustain its momentum as hyperscalers like Microsoft and Amazon ramp up their own AI infrastructure investments. The recent 6.12% surge on July 31 was likely driven by optimism around Nvidia's Blackwell GPU adoption, but profit-taking and earnings anxiety have since returned.

Data Processing Sector Dips as Microsoft Falls 1.12%
The broader Data Processing & Outsourced Services sector is under pressure, with Microsoft (MSFT) down 1.12% intraday. This mirrors Nebius' decline, suggesting sector-wide caution around AI infrastructure spending cycles. While Microsoft's scale provides it with more flexibility, smaller players like Nebius face sharper margin pressures. The sector's correlation with capex trends at tech giants remains strong, as evidenced by recent $260B in 2025 capex guidance from hyperscalers.

Bearish Options Play and Strategic Call Protection
• 52W High: $58.16 (above current price)
• 52W Low: $14.09 (extreme support)
• 200D MA: $32.78 (far below current price)
• RSI: 72.8 (overbought)
• MACD: 1.469 (bullish but flattening)
• Bollinger Bands: 56.498 (upper), 50.745 (middle), 44.992 (lower)

Technical indicators suggest a short-term overbought condition with diverging momentum. The stock is trading near its 52-week high but faces key resistance at the upper Bollinger Band ($56.498). With earnings approaching, volatility is expected to spike, making options the optimal play. Two contracts stand out:

• NBIS20250808C51.5 (Call) - Strike: $51.5, Delta: 0.579, IV: 110.32%, Turnover: 576,547
• NBIS20250808P51.5 (Put) - Strike: $51.5, Delta: -0.421, IV: 133.34%, Turnover: 4,464

For a bearish play, the NBIS20250808P51.5 put offers high leverage (14.57%) and 80% price change potential if the stock breaks below $51.5. The put's 133.34% implied volatility and -0.112683 theta suggest strong short-term decay protection. For bulls, the NBIS20250808C51.5 call provides 13.42% leverage with decent liquidity (576,547 turnover). Both contracts expire August 8, aligning with earnings expectations.

Payoff analysis: A 5% downside to $49.25 would yield $2.25 per put contract (max gain of $225/share). The call would see a $2.25 gain if the stock rallies to $53.75. Given the 4.7% intraday drop, the put appears more compelling for short-term volatility plays.

Backtest Nebius Group Stock Performance
The backtest of NBIS's performance after an intraday plunge of -5% shows favorable results. The 3-Day win rate is 60.44%, the 10-Day win rate is 65.93%, and the 30-Day win rate is 76.92%. Additionally, the maximum return during the backtest period was 41.14%, which occurred on day 59, indicating that NBIS had a strong recovery period following the intraday plunge.

Earnings Report Could Be Make-or-Break for Nebius' AI Momentum
Nebius Group faces a critical juncture as its August 7 earnings report could validate or challenge its position in the AI infrastructure race. While the stock has shown resilience with a 6.12% surge on July 31, today's 4.7% drop highlights the sector's sensitivity to guidance and competition. Investors should watch for confirmation of the $750M-$1B ARR target and any updates on EBITDA positivity in H2. Meanwhile, Microsoft's 1.12% decline underscores sector-wide caution. For strategic positioning, the NBIS20250808P51.5 put offers a high-leverage play on potential post-earnings volatility, while the NBIS20250808C51.5 call provides directional exposure. Aggressive traders should monitor the $51.5 level as a critical inflection point ahead of earnings.