NBIS Stock Tests Rally After Report Flags Acquisition Talks With An Israeli Startup Once Eyed By Nvidia

• Nebius stock declined 2% overnight, which risks disrupting its hot streak. 
• AI21 Labs had discussed a sale to Nvidia last year, but the deal didn’t pan out, according to The Information.
• Stocktwits sentiment for NBIS dipped to ‘bearish’ from ‘neutral.’

Nebius Group’s shares declined 2% in the overnight trading heading into Thursday, and retail sentiment dipped amid reports that it is closing in on a second acquisition this year.

The Information reported on Wednesday, citing sources, that the neocloud operator is in talks to buy Israel-based AI startup AI21 Labs. Interestingly, AI21 Labs, last valued at $1.4 billion in 2023, had discussed a sale to Nvidia last year, but the deal didn’t pan out.

Nvidia is a key backer of Nebius, having invested $2 billion as part of a wider partnership last month. 

The Nebius talks show the growing ambitions of upstart cloud providers, including CoreWeave and Together AI, who appear to be spending aggressively to increase capacity and gain customers, The Information reported.

AI21 Labs was founded in 2017 and currently focuses on AI systems and specialized AI agents for enterprise customers.

NBIS’ Hot Streak

In February, Nebius acquired Tavily, an AI search engine company for agents. “We’re not just an infrastructure-as-a-service company — we’re building the complete platform for anyone who wants to build AI products, agents, or services,” Nebius co-founder Roman Chernin said at the time.

Nebius’ share move risks disrupting its hottest streak in nearly a month. The stock rose 6.5% on Wednesday, triggered by widespread buying after the United States and Iran announced a two-week ceasefire.

Shares have gained 37% in the last nine sessions. Last week, the company unveiled plans to build a new AI factory in Lappeenranta, Finland. With a planned capacity of up to 310 MW, it would be among the largest dedicated AI factories in Europe.

Momentum was also driven by a massive, $15 billion cloud deal with Meta Platforms, announced last month.

Retail’s View On NBIS

On Stocktwits, the retail sentiment for NBIS, however, dipped to ‘bearish’ as of early Thursday, from ‘neutral’ the previous day. Traders expressed that market volatility remained despite the Iran ceasefire announcement, with some advising to book profits.

“$NVDA $META $NBIS $TSLA $MU Might be time to exit stocks on a high there is to much manipulation and uncertainties with trump in office,” said a trader.

Another user, with a bullish view, wrote: “$NBIS closed above that crucial $123 resistance level today, next upside level on watch from here is at $132, then can rally to new all time highs.”

As of their last close, NBIS shares are up 50% year to date.

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