Nebius Group (NBIS) Plunges 7.4% Amid Capital Raise Concerns and Execution Risks

Summary
• Nebius Group (NBIS) trades at $81.17, down 7.43% intraday after opening at $88.10
• $17.4B Microsoft AI infrastructure deal confirmed but overshadowed by $1B public offering and $2.75B convertible notes
• Intraday range of $80.06–$88.24 highlights sharp volatility amid mixed analyst sentiment

Nebius Group’s stock is in freefall despite landmark Microsoft contracts, as investors weigh execution risks and capital dilution. The $17.4B AI infrastructure agreement with Microsoft, while validating long-term demand, has been eclipsed by short-term concerns over a $1B share sale and $2.75B convertible notes. With a 52-week high of $141.10 and a dynamic P/E of 43.6, the stock’s sharp correction raises questions about its stretched valuation and ability to scale infrastructure without compromising margins.

Capital Raise and Execution Risks Trigger Sell-Off
The intraday selloff stems from Nebius’ $1B public offering of Class A shares at $92.50 and a $2.75B convertible note issuance, both aimed at funding data-center expansion. While the Microsoft deal provides multi-year revenue visibility, the aggressive capital raise has triggered profit-taking and dilution concerns. Analysts highlight that the $1B offering alone could dilute existing shareholders by ~12%, while the convertible notes add further complexity. Additionally, the company’s $5B full-year CAPEX guidance—up from $2B—raises questions about return on investment in a sector with intense competition from Amazon and Microsoft.

Internet Content & Information Sector Mixed as AMZN Drags
The Internet Content & Information sector, where Nebius operates, is under pressure as Amazon (AMZN) declines 1.69% intraday. While AMZN’s drop reflects broader e-commerce headwinds, Nebius’ 7.4% plunge is more pronounced, underscoring sector-specific risks. The sector’s exposure to AI infrastructure capital intensity and regulatory scrutiny amplifies volatility, with Nebius’ aggressive expansion plans contrasting against Amazon’s $125B CAPEX roadmap for 2025.

Bearish Technicals and Put Options for Short-Term Protection
• 200-day MA: $63.92 (far below current price), RSI: 54.1 (neutral), MACD: -2.69 (bearish), Bollinger Bands: $81.37–$104.83
• Short-term bearish trend confirmed by MACD crossover and RSI neutrality; long-term ranging suggests lack of clear direction

Key levels to watch: The lower Bollinger Band at $81.37 acts as immediate support, while the 200-day MA at $63.92 represents a critical long-term floor. With RSI hovering near 54, the stock is neither overbought nor oversold, but the bearish MACD (-2.69) and short-term bearish Kline pattern suggest continued downward pressure. Aggressive short-term bearish positioning is warranted, with put options offering leverage.

Top Options:
• NBIS20251219P80 (Put, $80 strike, 12/19 expiry): IV 98.57%, leverage 26.21%, delta -0.422, theta -0.053, gamma 0.0418, turnover $1.17M. High IV and moderate delta offer balanced risk/reward; theta decay manageable for short-term holding.
• NBIS20251219P81 (Put, $81 strike, 12/19 expiry): IV 98.86%, leverage 22.57%, delta -0.465, theta -0.027, gamma 0.0423, turnover $606K. Slightly higher delta for directional bias; gamma sensitivity ensures responsiveness to price swings.

Payoff analysis under 5% downside (to $77.11): NBIS20251219P80 yields $2.91 per contract (29.1% gain), while NBIS20251219P81 gains $3.91 (39.1%). Both contracts offer asymmetric upside in a bearish scenario. Aggressive short-sellers should prioritize NBIS20251219P80 for liquidity and IV premium.

Backtest Nebius Group Stock Performance
The backtest of the performance of the iShares National Muni Bond ETF (NBIS) after an intraday plunge of -7% from 2022 to now shows favorable short-to-medium-term gains. The 3-Day win rate is 60.29%, the 10-Day win rate is 65.44%, and the 30-Day win rate is 73.53%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest was 45.40% over 30 days, suggesting that NBIS has the potential for significant gains following a sharp decline.

Watch $81.37 Support and AMZN’s Sector Influence
Nebius’ 7.4% intraday drop reflects a mix of short-term capital dilution concerns and long-term execution risks. While the Microsoft deal validates demand, the stock’s ability to hold above $81.37 (lower Bollinger Band) will determine near-term stability. AMZN’s 1.69% decline as a sector leader adds context, but Nebius’ aggressive CAPEX and dilution make it more vulnerable. Investors should monitor the $81.37 level and AMZN’s trajectory—if AMZN breaks $130, Nebius’ puts gain urgency.