Nebius jumps 10% to $250 as Palantir deal lifts neocloud rally

Nebius shares jumped more than 10 percent to $250, their highest since Aug. 18, after Palantir named it preferred sovereign AI partner.

"Nebius' compute infrastructure powers your ability to run your own AI models under conditions you control," Alex Karp, chief executive at Palantir, said. "Our ontology and their infrastructure will undergird the sovereignty our partners are demanding."

The surge extends a recovery that began Tuesday last week, when the stock bottomed at $194.76, a rebound of roughly 27 percent. The shares have crossed their 50-day moving average and formed an inverted head-and-shoulders pattern, a bullish technical setup. The move mirrors gains across the neocloud complex, with CoreWeave up 13 percent to $101.32 and IREN also climbing as investors rotate into GPU infrastructure names.

Nebius is now testing the $250 pivot, a major support-resistance level on the Murrey Math Lines tool. A break above that, followed by $300, would open a path toward $312, while a failure risks a retest of the $194.76 floor. The company said it is sold out for the year and already selling 2027 capacity, with more than $40 billion in contracted AI infrastructure demand and a $5.75 billion funding round closed.

Palantir deal adds enterprise credibility

Under the partnership, Palantir will bring Nebius compute and inference endpoints inside its enterprise perimeter, giving Palantir customers access to the firm's cloud infrastructure. Nebius joins a customer list that includes Microsoft, Meta Platforms, Cloudflare and Revolut. Microsoft alone has committed more than $33 billion in capacity agreements with neocloud providers, including a $19.4 billion deal with Nebius covering more than 100,000 Nvidia GB300 chips.

The endorsement carries weight because Palantir is standardizing sovereign AI infrastructure, a second-order effect that could pull more enterprise workloads toward Nebius and its GPU cloud peers. Neocloud instances typically cost 60 to 70 percent less than equivalent offerings from hyperscalers such as AWS and Azure, a pricing edge that has helped CoreWeave, Lambda and Crusoe win multi-billion-dollar contracts.

Growth comes at a cost

Nebius revenue surged 454 percent in the second quarter to $582 million, beating the $567.91 million consensus, with the six-month figure reaching $981 million. The company posted a loss of 12 cents a share, narrower than the 67-cent deficit analysts expected. But depreciation and amortization climbed to more than $259 million, about 44 percent of revenue, and capital expenditure topped $5.7 billion.

Nebius has funded the buildout through borrowing, customer prepayments of roughly $9 billion, and share sales that raised $2.8 billion through June, with about 13 million shares still available to sell. Short interest stands near 20 percent, and the stock carries a beta of 4.23, making it highly sensitive to swings in the AI trade. California State Teachers Retirement System expanded its position by 23,011 percent during the second quarter, taking a 24.57 percent stake valued at $17.17 billion.

Bank of America raised its price objective to $280 from $240 with a buy rating, while Freedom Capital upgraded the shares to strong buy. The consensus target sits at $226, near current levels.

The next test is whether the sector rally holds. Nebius, CoreWeave and IREN have all moved in tandem this week, and a sustained advance would depend on continued demand for GPU capacity and the company's ability to convert its $40 billion backlog into revenue without further diluting shareholders. A pullback below $250 would put the $194.76 low back in play.

This article is for informational purposes only and does not constitute investment advice.