Nebius stock forms a rare bullish pattern despite elevated risks

Nebius stock price held steady this month, moving from a low of $73 on February 5 to the current $106.

It has formed a highly bullish chart pattern, pointing to an eventual rebound to last year's high of $140.

Nebius stock price technical analysis points to a rebound 

The daily timeframe chart shows that Nebius' share price has been one of the best-performing companies on Wall Street as it jumped from a low of $18 in April last year to the current $105.

A closer look shows that the stock has formed a highly bullish double-bottom at $73.15 and neckline at $109.37, its highest level on January 15.

A double-bottom is one of the most common bullish continuation signs.

The stock has flipped the Supertrend indicator from red to green. Additionally, it remains above the 50-day and 100-day Exponential Moving Averages (EMA).

The Relative Strength Index (RSI) has jumped and crossed the important neutral point at 50 and is pointing upwards.

Other oscillators like the MACD and the Percentage Price Oscillator (PPO) have continued rising.

Therefore, the most likely Nebius stock price forecast is bullish, with the next key target being at $140, its highest level in 2025, which is about 32% above the current level.

On the other hand, a move below the double-bottom level at $73 will invalidate the bullish outlook and point to more downside in the near term.

Nebius is benefiting from the ongoing AI boom 

Nebius, a top player in the data center industry, is benefiting from the ongoing artificial intelligence (AI) boom, which most analysts expect has more room to run in the coming years.

A good sign that the industry is booming is the recent financial results by some of the biggest companies in the United States.

Top companies like Microsoft, Google, Amazon, and Meta Platforms revealed that they will spend over $650 billion in capital expenditure this year.

The most recent results showed that its business is doing well, helped by its recent deals, including a $18 billion partnership with Microsoft and another one with Meta Platforms.

Its results showed that its revenue jumped to over $277 million in the fourth quarter to over $227 million from the $35 million it made in the same period in 2024. Most of this revenue came from its Core AI, which made over $227 million.

At the same time, its costs continued rising, moving to over $462 million from the $171 million in the same period a year earlier.

Most of these expenses were in depreciation and amortisation. This happened as it depreciated its previous servers, networks, and other equipment.

Analysts believe that the company has more growth to go in the future.

For example, they expect that its revenue will grow by 552% this quarter to over $360 million.

Its annual revenue is expected to come in at $3.35 billion, up by over 530% YoY.

Nebius Group is facing major headwinds, which explains why the short interest has jumped to 17%.

One of these challenges is that its depreciation costs will continue rising in the coming months as companies like Nvidia upgrade their chips in the future.

The data centre industry has become highly competitive, with companies like CoreWeave, IREN, TeraWulf, and Bitfarms moving into the industry.

Additionally, costs are soaring as the memory chipshortage accelerates.

Most analysts believe that this shortage will accelerate in the next few months. 

There are also customer financing risks as the private creditbusiness remains under pressure.

This is notable as many potential customers are relying on borrowed money to fund their data centre investments.