Jim Cramer Can’t Believe Nebius’ Capital Destruction As Stock Trades Deep In Bear Zone: ‘Pain Is Not Over’

• The broader market has taken a beating since hitting fresh peaks in late October, with AI skepticism largely to blame.
• Nebius announced a deal with Microsoft in early September to deliver dedicated capacity to the software giant from its new Vineland, New Jersey data center.
• Retail has chosen to ignore the negativity and see the dip as a buying opportunity.

Artificial intelligence (AI) infrastructure company Nebius Group N.V. (NBIS) “pain is not over,” according to CNBC Mad Money host Jim Cramer. Nebius stock is in deep correction territory, having declined about 40% since it hit a record high (intraday) of $141.10, set on Oct. 10.

The broader market has taken a beating since hitting fresh peaks in late October, with AI skepticism largely to blame. Bearish commentary from high-profile investors such as Michael Burry has also heightened the panic. 

Deals Raise Red Flag

In a post on X, Cramer said, “I can't believe the capital destruction for press releases on deals and nothing else….NBIS, NJ, Microsoft.”  The stock picker is referring to the multi-billion-dollar deal Nebius announced with Microsoft (MSFT) in early September to deliver dedicated capacity to the software giant from its new Vineland, New Jersey data center.

When the deal was announced, Nebius' stock got a shot in the arm, jumping 49% in a single session.  “In other words, stay away,” said Cramer.

AI Pessimism Abounds

The main point of contention for skeptics is the AI bubble that has been building since late 2022, when OpenAI launched its large language model, ChatGPT. They question the logic of AI names, big and small, splurging investment dollars on infrastructure buildout, fearing the returns may not be commensurate with the investment.

Of late, concerns of hyperscalers using accounting gimmicks to boost profitability have heightened. Burry, for one, called out Meta and Oracle in particular. After Nvidia reported stellar quarterly results, Burry questioned the Jensen Huang-led company’s stock-based compensation accounting.

AI bears also point out the circular deals in the space, such as those involving Nvidia, in which customers buy computing power from the company, and the chipmaker, in turn, invests in them.

What Retail Feels About Nebius Stock

On Stocktwits, retail sentiment toward the stock remained ‘bullish’ as of early Friday, and the message volume on the stream remained ‘high.’

Retail sees the pullback as a buying opportunity. “Sold my previous position last night at 99.85 and regretted it. What a gift it’s back in the low 80s today,” a user chimed in.

Another user shrugged the Nebius sell-off as a “market-driven” event. “The good thing is there is no Nebius-specific issue; if the market bounces, we will bounce,” they said.

Nebius' stock is up over 200% despite the recent volatility.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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