Why Is Nebius Stock Falling on Friday?

Nebius Group (NASDAQ:NBIS) stock fell on Friday after earnings reports from Amazon.com Inc. (NASDAQ:AMZN) and Intel Corp. (NASDAQ:INTC) came in below Wall Street expectations. The results added to concerns about spending on artificial intelligence infrastructure.

The Nasdaq is down 2.98% while the S&P 500 has shed 1.46% and technology is the weakest sector on the day with a 4.56% drop.

Nebius is a neocloud, a company that builds and rents out AI computing capacity, so its business depends on spending by large technology companies.

• Nebius Group shares are sliding. Why is NBIS stock dropping?

Amazon, Intel Miss Estimates

Amazon reported third-quarter revenue of $201.94 billion, below the $202.31 billion consensus, and earnings of $1.89 per share against $1.97 expected. Free cash flow for the trailing 12 months was an outflow of $42.4 billion.

Intel guided fourth-quarter revenue to $15 billion to $16 billion, below Wall Street’s estimate of roughly $17.1 billion.

Capital Spending Below Forecasts

Earlier in the week, Microsoft Corp. (NASDAQ:MSFT) reported $45.2 billion in capital expenditures and finance leases, below the $50.7 billion average analyst estimate, according to StreetAccount as cited by CNBC.

Microsoft CFO Amy Hood said on the earnings call that "some third-party capacity deliveries we expected in the first quarter were delayed."

Earnings Countdown

Nebius is scheduled to report earnings on Nov. 12. Analysts expect a loss of 69 cents per share, compared with a loss of 40 cents in the year-ago quarter. Revenue is projected to reach $906.01 million, up significantly from $146.10 million a year earlier.

Technical Analysis

From a longer-term trend perspective, Nebius is now trading 16.8% below its 20-day SMA, 25% below its 50-day SMA, and 27.3% below its 100-day SMA, which keeps the intermediate trend pointed down. Even with the 50-day SMA still above the 200-day SMA (a bullish longer-term structure), the stock is also 11.4% below its 200-day SMA, signaling that the longer-term uptrend is under stress.

Key levels are getting more important after the recent slide from the August swing high into the October swing low area, with prior turning points suggesting traders are watching for either a base or another leg lower.

• Key Resistance: $168.50 — Nearby rebound level that can act like a "ceiling" after a sharp sell-off.
• Key Support: $146 — Nearby area where buyers previously stepped in, making it a key line for bulls to defend.

NBIS Stock Price Activity: Nebius Group shares were down 11.95% at $151.44 at the time of publication on Friday, according to Benzinga Pro data.

Image via Shutterstock