Nebius Group Plunges 7.4%: What's Behind the Sudden Drop?

Summary
• Nebius Group (NBIS) trades at $69.72, down 7.4% from its previous close of $75.33
• Intraday range spans $69.09 to $75.21, reflecting sharp volatility
• Analysts have issued conflicting ratings, with one 'hold' and six 'buy' recommendations

Nebius Group’s stock has plunged to a 52-week low of $14.09, with today’s 7.4% decline marking its steepest drop in months. The move coincides with a surge in put options activity and a divergence from the IT Services sector leader, Amazon. Analysts remain split, but recent earnings and regulatory scrutiny may be fueling the sell-off.

Analyst Downgrades and Earnings Pressure Drive Sharp Decline
Nebius Group’s 7.4% drop follows a string of analyst actions and a weak earnings report. Despite a 'strong-buy' from Northland Capmk and a $90 price target from BWS Financial, the stock has been pressured by a $47.00 price target from Northland Securities and a $84.00 target from Arete. The company reported Q2 earnings of -$0.48, a 92% decline from -$0.25 in the prior year, while revenue rose 385% to $55.30 million. Institutional investors have also trimmed holdings, with Signaturefd LLC reducing its stake by 125% in Q2. The sell-off appears to reflect skepticism about the company’s ability to sustain growth amid rising costs and regulatory scrutiny.

IT Services Sector Splits as Amazon Rises, Nebius Falls
While Nebius Group tumbles, the IT Services sector leader, Amazon (AMZN), is up 1.33%. This divergence highlights divergent investor sentiment: Amazon’s cloud infrastructure and AI investments are gaining traction, while Nebius faces questions about its AI-centric cloud platform’s scalability. The sector’s broader momentum is mixed, with the Roundhill Generative AI & Technology ETF (CHAT) down 0.94% and the ROBO Global Artificial Intelligence ETF (THNQ) up 0.96%. Nebius’s struggles underscore the sector’s bifurcation between established players and high-risk innovators.

Options and ETFs for Navigating Nebius’s Volatility
• 200-day average: $34.50 (far below current price)
• RSI: 83.74 (overbought territory)
• MACD: 5.21 (bullish divergence)
• Bollinger Bands: Upper at $70.88, Middle at $56.18, Lower at $41.47

Nebius’s technicals suggest a short-term overbought condition, but the 5.21 MACD and 83.74 RSI indicate potential for a pullback. Key support levels at $51.75 and $20.65 (200D range) could dictate near-term direction. The Themes Cybersecurity ETF (SPAM), up 0.76%, and ROBO Global Artificial Intelligence ETF (THNQ), up 0.96%, offer sector exposure, though both face headwinds from Nebius’s underperformance.

Top Options Picks:
• NBIS20250822P70 (Put):
- Strike: $70, Expiration: 2025-08-22
- IV: 77.01% (high volatility)
- Leverage: 20.01% (moderate)
- Delta: -0.4696 (sensitive to price drops)
- Theta: -0.0214 (slow time decay)
- Gamma: 0.0446 (responsive to price swings)
- Turnover: $266,487 (liquid)
- Payoff at 5% Downside: $0.26 per share (max profit if price falls below $70)
- Why: High IV and moderate leverage make this put ideal for a short-term bearish bet.

• NBIS20250822P71 (Put):
- Strike: $71, Expiration: 2025-08-22
- IV: 83.46% (extreme volatility)
- Leverage: 16.14% (aggressive)
- Delta: -0.5088 (high sensitivity)
- Theta: -0.0214 (slow decay)
- Gamma: 0.0412 (moderate responsiveness)
- Turnover: $61,278 (liquid)
- Payoff at 5% Downside: $1.26 per share (max profit if price falls below $71)
- Why: Extreme IV and high delta position this as a high-reward, high-risk play for a sharp drop.

Action: Aggressive bears should prioritize NBIS20250822P70 for a controlled downside bet, while NBIS20250822P71 offers outsized potential if the sell-off accelerates.

Backtest Nebius Group Stock Performance
The backtest of NBIS's performance after an intraday plunge of -7% shows favorable results. The 3-Day win rate is 62.37%, the 10-Day win rate is 68.82%, and the 30-Day win rate is 82.80%. Additionally, the maximum return during the backtest period was 46.38%, with a maximum return day at 59.

Urgent: Key Levels and Options to Watch Before Expiry
Nebius Group’s 7.4% drop has created a critical juncture for investors. The stock’s overbought RSI and bullish MACD suggest a potential rebound, but the 52-week low at $14.09 looms as a psychological barrier. Short-term options like NBIS20250822P70 and NBIS20250822P71 offer high leverage for a bearish move, while the sector’s divergence from Amazon’s 1.33% gain highlights the need for caution. Watch the $70.88 Bollinger Upper Band and $56.18 Middle Band for directional clues. If Amazon’s momentum wanes, Nebius’s underperformance could intensify. Act now: Secure NBIS20250822P70 for a disciplined downside play or monitor the $70.88 level for a potential reversal.