Nebius Group (NASDAQ: NBIS), an artificial intelligence cloud infrastructure company, saw its shares surge 19.5% in June before giving back nearly all of those gains in the first trading week of July.
The sharp reversal underscores the extreme volatility investors should expect from a stock that has more than quadrupled over the past 12 months.
Investors have been drawn to Nebius in large numbers due to its spectacular revenue growth, which has accelerated dramatically alongside the company’s expanding data center footprint.
From just $105 million in revenue in the second quarter of the prior year, Nebius reached an annualized revenue run rate of $1.25 billion by the fourth quarter, a pace that few companies at this scale can match.
Management now anticipates exceeding $3 billion in total revenue for 2026, and projects that the company could more than double that figure again in 2027.
A major catalyst for the June rally came on June 11, when Nasdaq announced it was adding Nebius to the Nasdaq-100 index alongside Astera Labs, CoreWeave, Rocket Lab, and Teradyne, sending the stock up nearly 10% on the day of the announcement alone.
Nebius officially joined the Nasdaq-100 on June 22, triggering automatic purchases by index-tracking funds and adding further upward pressure on shares.
The company also completed its acquisition of Eigen AI on June 10, an inference and model optimization firm expected to improve Nebius’ token factory inference platform and give customers faster access to new AI models.
Nebius ended the first quarter with $9.3 billion in cash on hand, having raised $6.3 billion during the quarter through convertible notes and an investment from Nvidia.
Shares are up more than 150% year to date, pushing the company’s market capitalization to approximately $55 billion, a lofty valuation even when measured against its projected 2027 sales figures.
Despite the strong demand environment, the company faces meaningful competition from players such as CoreWeave, which operates in the same AI cloud infrastructure space.
Any signal of slowing enterprise spending on cloud capacity would likely hit Nebius and its peers disproportionately hard compared to the broader technology sector.
The same growth characteristics that attract investors also make the stock acutely sensitive to macro uncertainty and shifting sentiment around AI infrastructure spending.
Long-term investors may find the volatility creates periodic opportunities to add to positions at more attractive prices, with meaningful corrections likely to recur given the stock’s elevated valuation and sector dynamics.
