Nebius Group Pulls Back 9% After a Downgrade Despite Strong Earnings

Ryan Hasson, MarketBeat

Tue, May 19, 2026 at 10:35 AM EDT 4 min read

Key Points

• Interested in Nebius Group N.V.? Here are five stocks we like better.

• Nebius Group reported Q1 2026 revenue of $399 million, up 684% year over year, while reiterating its full-year guidance of $3 billion to $3.4 billion.

• NBIS fell nearly 9% on Monday after DA Davidson downgraded the stock from Buy to Neutral on valuation concerns following a major post-earnings surge.

• Despite the pullback, NBIS remains up almost 140% year to date, and the underlying business fundamentals, including $46 billion in committed contracts, remain intact.

Nebius Group (NASDAQ: NBIS) delivered an impressive earnings report on May 14, reporting revenue of $399 million, up 684% year over year. The company also reiterated its 2026 revenue guidance of $3 billion to $3.4 billion and raised its contracted power guidance to over 4 gigawatts by year-end.

It broke ground on its first U.S. gigawatt-scale AI factory. And a wave of analyst price target increases followed, with Citigroup raising its target from $169 to $287 and Citizens Jmp raising its target to $270. And yet, on Monday, the stock fell almost 9%. For investors who have followed the Nebius story, the question is a natural one: Is this something to worry about, or is it simply the price of admission on one of the market's most high-velocity growth stocks?

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What Triggered the Move

The primary catalyst for Monday's selloff was a downgrade from DA Davidson, which moved the stock from Buy to Neutral. The timing is notable. DA Davidson had raised its price target from $200 to $250 following the earnings report last week, reflecting genuine conviction in the fundamental story. A deterioration in the business did not drive the downgrade to Neutral just days later; instead, valuation did. After a surge of close to 30% in the days following earnings, the stock ran well ahead of even the most recently raised price targets. DA Davidson's move was a signal that, at current prices, the risk-reward had become more balanced, not that the thesis had changed.

Broader sector weakness among AI and neocloud names added to the pressure on Monday. CoreWeave (NASDAQ: CRWV), which DA Davidson also moved to Neutral at the same time, saw a similar market reaction.

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The Earnings Themselves Were Exceptional

It is worth separating the stock's short-term price action from the underlying business momentum, because the Q1 2026 results were genuinely impressive. Revenue of $399 million grew 684% year over year from $50.9 million in Q1 2025. Adjusted EPS of negative 23 cents crushed the negative 77-cent consensus estimate by 54 cents.