Nebius Group (NASDAQ:NBIS) stock continued its comeback and is now eying its all-time high after its strong financial results. It ended the week at $277.70, a few points below its all-time high of $298. It has soared by 190% this year, even as its short interest has jumped to 25.6%.
Nebius Group’s Business is Booming Amid the AI Boom
Nebius, a top neocloud, has become one of the fastest-growing companies this year, helped by the strong demand of its services. It is offering data center services to companies like Meta Platforms (NASDAQ:META), Cohere, and Reflection.
Its demand has jumped substantially, with management hinting that it can sell out its 2027 business today. Its numbers showed that its revenue jumped by 454% in the second quarter to $582 million. This surge brought its six-month revenue to $981 million, up by 529% YoY.
Analysts are optimistic that the growth will continue as it continues to monetize its infrastructure. Yahoo Finance data shows that the average revenue estimate for the year is $3.41 billion, up by 543% YoY, followed by $8 billion next year.
Still, despite this growth, many investors have continued to short the company. Its short interest has soared to 25.6%, higher than CoreWeave’s (NASDAQ:CRWV) 15% and Riot Platforms’ (NASDAQ:RIOT) 14%. Michael Burry, who predicted the Global Housing Crisis, is one of those investors with a short bet on the company.
A major issue among analysts is that the company’s cash burn is continuing. Its cash burn jumped to over $5.4 billion in the last quarter and $8.1 billion in the first six months of the year. This cash burn means that it may need to raise additional capital in terms of debt and equity later this year.
The neocloud industry is also getting highly competitive, with companies like Meta, SpaceX, and most Bitcoin (CRYPTO: BTC) mining companies entering the industry.
Nebius Stock is Nearing All-Time High as a Risky Pattern Slowly Forms
NBIS stock chart | Source: TradingView
The daily chart shows that the NBIS stock bottomed at $146 in July and has now pared back these losses. It has jumped and is now nearing the all-time high of $298.9. Also, it has already moved above the 50-day moving average, while the Average Directional Index (ADX) has moved to 15.60.
A closer look shows that the stock is slowly forming a double-top pattern at $298, with the neckline at $146, its lowest level on July 29. This pattern often leads to a bearish reversal over time.
Therefore, there is a risk that the stock will rise to $298 and then resume the downward trend. This view will be invalidated if it cruises above this double-top level.
Image: Shutterstock
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