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TV host Jim Cramer issued a stark warning to investors regarding Dutch AI infrastructure company, Nebius Group N.V. (NASDAQ:NBIS), and other similar companies, citing significant losses tied to hype-driven capex and losses resulting from the same.
On Thursday, in a post on X, Cramer said, “The pain in the NBIS's is not over,” referring to the Amsterdam-based AI infrastructure play, and others just like it, which continue to post operating losses, amid growing capex, while their stocks rally.
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“I can’t believe the capital destruction,” he said, referring to the massive CapEx that these companies often undertake to sign deals with big tech giants such as Microsoft Corp. (NASDAQ:MSFT), which are touted using flashy press releases to drive the stock higher.
All of this is done without giving any consideration to driving tangible profits or shareholder value in the long run, echoing concerns that several prominent analysts have expressed in recent months. “In other words,” Cramer said, “stay away.”
Despite reporting a strong third-quarter performance last week, the stock has been on a steady decline throughout this month, down more than 37% since its all-time high last month.
Shares of Nebius were down 10.97% on Thursday, closing at $84.64, and are down another 1.23% overnight. The stock scores high on Momentum in Benzinga’s Edge Stock Rankings, with a favorable price trend in the long term. Click here for deeper insights into the stock, its peers and competitors.
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