Nebius Group Plummets 6.4%: What's Behind the Sudden Drop?

Summary
• Nebius Group (NBIS) plunges 6.4% intraday to $80.06, its lowest since late November 2025
• $3.7B capital raise and $17.4B Microsoft deal trigger profit-taking and volatility
• Analysts split between 'Strong Buy' and 'Sell' amid stretched valuations and execution risks

Nebius Group’s stock is in freefall after a $3.7B capital raise and mixed analyst sentiment. The AI infrastructure play, which surged 51% post-Microsoft deal, now faces profit-taking pressure and valuation concerns. With a 52-week high of $141.1 and a dynamic PE of 44.1, the stock’s sharp correction has sparked debate over its long-term viability in a crowded AI cloud market.

Capital Raise and Profit-Taking Trigger Sharp Decline
Nebius Group’s 6.4% intraday drop stems from a $3.7B capital raise (via $1B share sale and $2.75B convertible notes) and profit-taking following its 51% rally post-Microsoft deal. The $17.4B infrastructure contract, while validating its AI platform, has raised concerns about dilution and execution risks. Analysts highlight stretched valuations (4.59x P/B vs. 3.84x industry) and capital intensity ($5B CAPEX guidance), while competitors like Microsoft and CoreWeave face similar scaling challenges. The stock’s decline mirrors broader AI infrastructure sector jitters as investors reassess growth sustainability.

Options Playbook: Puts and Calls for Volatility
• MACD: -2.69 (bearish divergence), Signal Line: -2.88, Histogram: 0.19 (short-term bearish)
• RSI: 54.1 (neutral), Bollinger Bands: $81.37–$104.83 (wide range)
• 200D MA: $63.92 (far below current price), 30D MA: $98.56 (resistance)
• Support/Resistance: 30D $94.67–$95.63, 200D $50.06–$52.37

Technical indicators signal a volatile setup. Nebius is trading near its 200D MA but remains above key support at $81.37. The RSI’s neutrality and MACD’s bearish divergence suggest a potential continuation of the decline. For options, focus on high-leverage puts and calls with moderate deltas to capitalize on short-term swings.

Top Put: NBIS20251219P80
• Code: NBIS20251219P80, Expiry: 2025-12-19, Strike: $80
• IV: 98.88% (high volatility), Delta: -0.392 (moderate sensitivity), Theta: -0.0717 (moderate time decay), Gamma: 0.0405 (responsive to price moves), Turnover: $1.09M (liquid)
• This put offers 29.17% leverage and is ideal for a 5% downside scenario (targeting $78.00). A 5% drop to $78.05 would yield a $1.95 payoff (max(0, $80 - $78.05)).

Top Call: NBIS20251219C80
• Code: NBIS20251219C80, Expiry: 2025-12-19, Strike: $80
• IV: 103.32% (high volatility), Delta: 0.605 (high sensitivity), Theta: -0.7556 (aggressive time decay), Gamma: 0.0388 (moderate responsiveness), Turnover: $253.5K (liquid)
• This call provides 16.4% leverage and is suited for a rebound above $80. A 5% rally to $86.15 would yield a $6.15 payoff (max(0, $86.15 - $80)).

Action: Aggressive bulls may consider NBIS20251219C80 into a bounce above $80. Cautious bears should target NBIS20251219P80 for a 5% downside play.

Backtest Nebius Group Stock Performance
The NBIS ETF has demonstrated robust performance after experiencing a significant intraday plunge of -6% in 2022. The backtest results reveal that 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 short term following the intraday plunge. The maximum return during the backtest period was 45.40%, which occurred on day 59, further suggesting that the NBIS ETF has the potential for strong recovery after a sharp decline.

Act Now: Position for Volatility or Exit Risk
Nebius Group’s 6.4% drop reflects a mix of profit-taking, capital raise dilution, and valuation concerns. While the $17.4B Microsoft deal validates its AI infrastructure, execution risks and sector-wide jitters remain. Technicals suggest a volatile near-term path, with key support at $81.37 and resistance at $94.67. Investors should monitor the 200D MA ($63.92) as a critical trend line. For context, sector leader Amazon (AMZN) is down 1.45%, signaling broader market caution. Act now: Short-term traders can exploit the put/call spread, while long-term holders may consider partial exits to mitigate downside risk.