Nebius' 550% Rally Prompts Short Seller Exodus After Blowout Results
$NEBIUS(NBIS)$ short sellers abandoned their bearish wagers after a blowout earnings results pushed the stock to a new all-time high, taking gains over the past year above 550% and raising the risk of a squeeze.
Before noon Thursday, the daily share price gain stood at 10% after the company's financial results released a day earlier showed an explosive demand for AI-centric cloud services that sent its first quarter revenue climbing more than seven-fold to $399 million in the three months ended March 31. That exceeded the $391.6 million average estimate by analysts, according to Bloomberg consensus.
Short volume, or the number of borrowed shares that were sold short more than tripled to 3.48 million Wednesday as the stock rallied 16%. The bears faced immediate pressure as the stock climbed above the resistance level of $220.80, a price point where a stock historically struggles to rise above because sellers typically outnumber buyers at that level.
Short interest for the company has climbed steadily since October and was at 17% as of April 30, according to the latest exchange data available. Short interest is the total number of shares that investors have borrowed and sold with the hope of buying them back later at a lower price.
A high short interest means many traders are betting the stock price will fall. When the price rises instead, these traders must buy shares to close their positions and prevent further losses.
This forced buying by bearish traders is known as a short squeeze, which can rapidly accelerate a price rally. The high volume suggests this process began as the stock moved toward its intraday high.
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