Nebius Group (NASDAQ: NBIS), the AI cloud infrastructure provider, dropped approximately 2.5% to $237.70 at around 10:39 a.m. ET on Friday, even as BNP Paribas issued a bullish upgrade on the stock.
BNP Paribas lifted its rating on Nebius from Neutral to Outperform and raised its price target significantly, moving from $260 to $399 per share.
The new $399 target represents a premium of nearly 68% above Friday’s trading price, signaling strong conviction from the French banking giant despite the day’s negative price action.
The upgrade arrives against a backdrop of impressive revenue figures that Nebius reported for the second quarter, with sales reaching $582.3 million, a 454% increase from the same period a year earlier.
Alongside that top-line surge, Nebius posted adjusted EBITDA of $236.2 million for the quarter, reflecting the scale of growth the company has achieved in a relatively short period.
The company’s investor presentation maintained full-year annualized revenue run-rate guidance of between $7 billion and $9 billion, a range that underlines management’s confidence in sustained demand.
Nebius also highlighted customer prepayments in its investor materials, describing them as a mechanism that can help fund the buildout of new data center capacity without relying entirely on external financing.
Despite those growth metrics, the stock’s GF Score of 55 out of 100 points to a disconnect between momentum and underlying value, with the GF Value reading notably weaker than the growth trajectory might suggest.
That gap captures the tension playing out in Friday’s trading session, as investors acknowledge the explosive revenue growth while weighing the risks that remain around construction costs, power availability, and capacity utilization.
The central question facing Nebius is not whether it can grow, but whether it can translate that rapid capacity expansion into profitable, sustainable revenue at a scale that justifies the lofty expectations embedded in analyst targets.
Until those execution questions are answered convincingly, the stock may continue to trade at a discount to even the most optimistic analyst projections, regardless of how compelling the underlying growth story appears on paper.
