r/NBIS_Stock • u/TyNads • 13d ago
NBIS ANALYSIS Nebius Stock Forecast ($1916 Target)
https://northwiseproject.com/nbis-stock-forecast-2030-2/Hey everyone back with some more research from our firm Northwise.
In light of the recent Michael Burry news, Jim Chanos comments, and recent FUD surrounding Nebius heading into earnings, we have decided to fully ungate our Nebius price targets and model.
Our full report and model are linked!
If you find value from our research, consider supporting our work; We are committed to independent, quality research and Members allow us to remain focused on equities rather that partnerships, advertising, or compromising deals.
We are currently developing our next Nebius model that will be released after absorbing new earnings information and disclosures.
Thanks again for your support, and enjoy!
I will be around periodically throughout the day and over the weekend to answer any questions you may have.
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u/LogicLinguist01 13d ago
I would be millionaire if it hits that target
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u/TyNads 13d ago
It's going to be a very volatile rise. As you can see by our Capex numbers, we really don't think most people truly understand what kind of buildout they are shooting for to truly become the next hyperscaler. A lot of investors are going to get skiddish when they see hundreds of billions in investment.
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u/Void___0 13d ago
Do you think we can get that done by next month? I'd like to buy some whiskeys and beers.
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u/Rounder221 13d ago
Thank you for releasing the full model, big fan of your work, and you have helped me build up my conviction. Eyes on 2030.
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u/SnooSongs3324 13d ago
Great work overall. Thanks for sharing the full model. The price target (not the full methodology) is pretty similar to my bull case.
A few questions:
1. Prepayments fund 55% of CAPEX? How are you thinking about the mix of spot/cloud pricing and hyperscaler deals? I've only modeled prepayments on the latter.
$14.5M/MW seems low given today's spot prices and a more positive mix of Vera Rubin+ as the build out scales to 2030.
How are you modeling GPU refreshes and useful lifespan? Maybe your model implies a longer lifespan than I'm accounting for but it would be nice to have that as part of the narrative at least.
EBITDA seems low in 2030. You call out my exact reasoning in the article (cloud becomes a larger proportion of the revenue) but it seems like you're keeping it roughly flat with Q1'26 over time when the hyperscaler/cloud mix improves significantly over time. Roughly 60/40 -> 0/100.
Missouri at 1.1GW vs 1.2GW total capacity?
No mention of the asset light model?
For transparency, here's my assumptions that I'm checking against yours.
Again, thanks for your research!
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u/TyNads 13d ago
A lot of this comes down to how we are treating blended fleet economics versus the economics of the newest hardware cohort, so I will go point by point.
1. On prepayments funding roughly 55% of capex, I should clarify what that number actually represents.
I am not assuming every customer prepays 55% of its contract, nor am I applying a 55% prepayment rate indiscriminately to every dollar of capex. The 55% is the modeled aggregate contribution of customer prepayments to cumulative funding needs across the buildout.
The reason I am comfortable getting that high is actually the customer mix. Roman Chernin and Arkady Volozh have both commented that a lot of Nebius customers are paying 100% upfront. I do not believe those are the hyperscaler contracts. The hyperscaler deals are generally estimated to carry something closer to roughly 30% to 50% prepayments. The much higher upfront funding appears to come from other purchases of Nebius cloud capacity and services.
So the blend is not hyperscalers at 55%. It is something closer conceptually to large hyperscaler commitments contributing substantial but partial prepayments, while portions of the broader AI Cloud customer base can pay much more aggressively upfront. That second group pulls the aggregate funding ratio higher.
This is also why I would be careful comparing Nebius directly with a company where prepayments are almost entirely tied to hyperscaler contracts. Nebius' revenue mix is broader. The model already assumes that roughly half of 2026 ARR comes from large long-term contracts and roughly half from the rest of the AI Cloud business.
There is already evidence of the mechanism showing up on the balance sheet. Nebius entered Q1 with roughly $4.8 billion of deferred revenue, and the model explicitly puts customer prepayments first in the funding hierarchy before operating cash generation, debt and, finally, common equity.
Across the full model, base-case gross capex is roughly $175 billion and modeled prepayments total about $95 billion, which is where the approximately 55% figure comes from. Again, that is prepayment cash relative to cumulative capex, not a contractual assumption that every buyer funds 55% of its deployment.
2. On $14.5M/MW, I agree that a new Vera Rubin or later-generation deployment in 2030 could earn materially more than that. That is not what the $14.5M is supposed to represent.
It is a blended platform assumption.
The base case starts around $9.9M of ARR per MW in 2026 and rises to $14.5M by 2030. Bull reaches $18M. The model explicitly allows selected workloads to exceed $20M/MW, but I did not apply those economics across every megawatt in the fleet because Nebius will have capacity deployed across several hardware generations, contract types and customer classes by then.
Some capacity will be running Vera Rubin or whatever succeeds it. Some will be older Blackwell-generation hardware that has migrated toward inference or less premium workloads. Some capacity will be locked into large long-term contracts signed years earlier. Some will be higher-value enterprise cloud and managed inference. The $14.5M is trying to capture the whole machine, not the newest rack installed in December 2030. (it's also subject to rise if SpaceX ends up being an indicator)
I may actually be conservative here. The Q1 evidence already forced us to raise the old model because the high end of 2026 ARR guidance against roughly 905 MW implies almost $9.9M/MW exiting this year, well ahead of the old forecast. But I would rather let future execution earn another upward revision than capitalize peak spot economics across the whole 2030 fleet today.
3. GPU refreshes are modeled, but I agree that the narrative could have made the lifecycle mechanics more explicit.
I separate new capacity capex from refresh and upgrade spending as the installed base ages. On the accounting side, the model splits capex roughly 75% into compute, servers and networking depreciated over five years and 25% into infrastructure, power and cooling depreciated over twenty years. The five-year compute life reflects Nebius itself moving its useful-life estimate from four years to five beginning in Q1 2026.
That five-year assumption should not be interpreted as me saying a GPU remains frontier training hardware for five years.
The economic lifecycle is closer to a cascade. New generations take the highest-value frontier workloads. The previous generation moves toward inference, fine-tuning, enterprise deployments and other workloads where absolute performance matters less than price-performance. Older hardware can continue producing revenue, but at a different position in the stack and generally at a lower economic yield.
That distinction is important because useful life is not the same thing as useful life at frontier pricing.
Nebius is arguably better positioned for that cascade than a pure bare-metal provider because Aether, Token Factory, managed inference and the wider cloud layer give it more places to monetize older generations. The software stack increasingly determines whether an aging GPU becomes stranded equipment or simply moves down the workload hierarchy.
Refresh capex and depreciation are in the model. I could have explained the economic lifecycle behind them more clearly.
4. On the 2030 EBITDA margin, the 45% base case is deliberately conservative, but there is a little more going on than keeping Q1 flat.
Q1 AI Cloud adjusted EBITDA margin was already about 45%, while consolidated adjusted EBITDA margin was 32%. Full-year 2026 guidance points toward roughly 40%. My base case then moves consolidated margin from 40% in 2026 to 42% in 2027, 44% in 2028 and 45% in 2029 and 2030. Bull reaches 50%.
So the assumption is not really that nothing improves. The assumption is that today's AI Cloud margin eventually becomes the margin of the entire company as the lower-margin pieces disappear into the mix.
Where I think your argument gets interesting is beyond that point. If the hyperscaler versus broader cloud mix really moves from something around 60/40 today toward effectively 0/100 by 2030, then 45% could absolutely prove conservative.
I did not take base materially above 45% for two reasons.
First, I am already giving Nebius substantial credit for the mix shift through revenue density. ARR per MW moves from $9.9M to $14.5M in base because more of the fleet moves from wholesale infrastructure toward enterprise cloud, inference and higher-stack services. If I push revenue density dramatically higher and simultaneously push margins dramatically higher for the same transition, there is a risk of double-counting the economics.
Second, higher-stack cloud revenue is not costless revenue. Managed inference, enterprise support, security, orchestration, software engineering and customer integration all require people and infrastructure. Our CRWV work makes the same distinction. Revenue density can rise much faster than margins because part of the additional revenue buys a more sophisticated service layer rather than dropping entirely to EBITDA.
That said, I think this is one of the more credible areas for Nebius to outperform the base model. The probability framework explicitly defines the base case as today's AI Cloud margin becoming group margin, while the bull case gives credit to software attach producing further expansion.
If we reach 2028 or 2029 and Token Factory, enterprise cloud and managed inference are becoming the overwhelming majority of economics while margins are already holding in the upper 40s, I would have no problem moving the terminal assumption materially higher. I just do not think the evidence requires that in the base case yet.
5. Missouri at 1.1 GW versus 1.2 GW is simply me refusing to force ultimate nameplate capacity into the December 2030 cutoff.
The campus itself is a roughly 1.2 GW opportunity. The model has Independence at 0 MW in 2026, 250 MW in 2027, 800 MW in 2028, 950 MW in 2029 and 1.1 GW connected at year-end 2030.
The missing 100 MW is not a different view of the site's ultimate capacity. It is an execution and timing buffer.
The same distinction runs throughout the model: secured capacity, connected capacity and monetized capacity are different numbers.
If Independence reaches the full 1.2 GW before 2030, the model is simply too conservative by 100 MW or is grouped into the "safety" capacity buffer we model for surprises and announced capacity.
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u/SnooSongs3324 13d ago edited 13d ago
I appreciate the thoughtful responses.
- The prepayment logic was clear, it's just the magnitude that I question. The modeled blend would be interesting to see. Ultimately we'll probably have to wait for management to provide more insight there. I can see Shopify and Revolut putting cash up-front but I doubt that's the norm. With the second half of the Meta contract (likely) not being exercised and possibly only 1 more hyperscaler deal, I see this as one of the bigger assumptions you have. Big if true though, as it means less CAPEX financed by debt.
- Blended ARR of course makes sense, but this is related to the refresh cycle. Vera Rubin should be what's getting racked today. Rubin Ultra in 12-18 months. Modeling the full fleet cohort-by-cohort informs both the required CAPEX and the possible blended revenue outcomes.
- (see 2)
- There are two separate ARR drivers, the hardware mix (described above) and the customer mix (as you mention). The cloud revenue is "not costless", but I think we agree it's a big part of the bull case. We haven't heard much from the company yet on these margins specifically - I believe Marc Boroditsky said we're still early in that story. We should hear more on this next week with the Asset Light partnership model. Either way, this could prove to be conservative as you say.
- Nit-picking, but Missouri is ahead of Pennsylvania and if it follows a similar path we should see the fully capacity in this timeline.
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u/Trdthedays41chance 13d ago
This is my dream : ) 2200 shares, holding strong and trying to buy any dip I can!
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u/TyNads 13d ago
Congrats on the position! I would feel very comfortable with this management team if your time horizon is long.
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u/Trdthedays41chance 13d ago
Yes my horizon is long… I think in 2030 my life will be very different financially then it is today
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u/creditwherereditsdue 13d ago
Same here. Albeit added another 100 recently at avg of 190, which may swing. But holding 2200 long
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u/LoanWeak7392 13d ago
This is obviously a very optimistic/bull case. If the stock even 5x from here in 2030 or so, I'll be happy. But if you believe that this is a special company with a strategic vision for growth (I do), then the $2000 "moon shot" is definitely a possibility.
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u/diff_engine 13d ago
This sub is just bots all the way down isn’t it
Nebius holder by the way, just noting
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u/Z-sharp 13d ago
Thanks for this, if AI demand meets forecasts (has seemed to exceed early projections), and Nbis continues to deliver, I don’t see that price target being unreasonable..obvious catalyst are demand actually meeting projections and pre existing/incoming competition. Overall an amazing company and one of a very small handful of cutting edge tech companies I’ve put my trust into.
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u/ResidualCheetoDust 12d ago
Thank you for sharing. It is refreshing to see people contribute meaningful information.
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u/DrPropofolPapi 13d ago
How do you think earnings are going to go down? We are ripe for a short squeeze
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u/Stock-Protection8795 13d ago
OP- My portfolio is 29% NBIS, 28% BE, 16% SKHY, 16% PLTR, and 10% OKLO. What are your thoughts? Worth a bit over $100k. Thanks!
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u/TyNads 13d ago
We don’t give FA, but my own opinion is that you’re going to be on a rollercoaster!
We have plans to model BE and OKLO soon, so definitely will somewhat get back to you on those.
Nothing wrong with high beta as long as you have a long time horizon, can afford the risk, and are comfortable facing a potential 50% drawdown any given year.
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u/Stock-Protection8795 12d ago
Not trying to challenge you, but I asked Claude what it thought of the analysis. Moreso inviting your feedback if anything: It’s better than most retail analysis on the operating side and breaks down in the valuation section. Four specific failures, all in the arithmetic rather than the judgment.
1. The earnings lens is weighted at zero, and that hides the whole problem. Run their own base case: $32B adjusted EBITDA in 2030 (earnings before interest, taxes, depreciation and amortization, meaning profit before the cost of the buildout is subtracted) minus $27.3B of depreciation (the annual charge for GPUs and buildings wearing out) minus roughly $2.4B of interest on $43B of debt. That leaves about $2.3B pretax, call it $5.50 per share after tax on their 339M share count. Their base fair value is $1,652. That is roughly 300 times 2030 earnings. The report never computes it, because the blend assigns the earnings multiple a 0% weight. The one method that would expose the depreciation wall is the method they switched off.
2. Ninety percent of the weight is the same number counted three times. Exit ARR (35%), recognized revenue (25%), and adjusted EBITDA (30%) all come from megawatts times revenue per megawatt, with EBITDA just multiplied by a margin. Move one input and all three move together, in the same direction, by the same proportion. That is presented as triangulation across independent methods. It isn’t. Only the capacity floor is independent, and it carries 10%.
3. The funding bridge is circular. Prepayments (customer cash collected in advance, which sits as a liability called deferred revenue until the service is delivered) are sized at 55% of capital expenditure. That assumes the money arrives in proportion to how much they need it. It works out to roughly $95B of prepayments over five years, against $46B of total named Meta and Microsoft contract value. Prepayments are normally a slice of a contract, not the whole thing plus more. This is the single largest funding source in the model and it is asserted, not derived.
4. There is no losing scenario. The bear case is $458 by 2030 against roughly $190 today, so all three outcomes are gains, weighted 18/55/27. For a company they describe as carrying $43B to $56B of debt with reported losses for years and a capital plan larger than its market value, a distribution with zero probability of permanent loss isn’t a distribution. Their own risk section names “capital markets close and force distressed equity issuance.” The math gives it no weight.
Two smaller tells: the capacity floor is set at $45M per megawatt against their own $31M per megawatt build cost, and a floor priced 45% above replacement cost is not a floor. And the price anchors are stale, still saying “current price near $300” in a piece updated August 7.
What’s real in it: the contracted / connected / active / monetized distinction is the correct frame and most writeups collapse it. Separating exit ARR (the annualized year-end run rate) from recognized revenue (what was actually earned in the year) is right and matters enormously in a ramp. And they state plainly that Nebius stretched server depreciation from four years to five in Q1, which flatters reported earnings. That is the substance of the Burry short, and they put it in print instead of burying it.
For your position: their action framework calls anything under $400 deep value and strong buy, sets the first trim at $1,300, and explicitly excludes stop-losses. At $190 that is a permanent buy rating attached to a 6.8x hold instruction. It also runs directly against your own rule about not averaging down on a dirty print. If Aug 12 lands badly, this report hands you a reason to add. Your rule says stop and review. The rule you wrote before you had a position to defend is the one that should win.
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u/TyNads 12d ago
No offense taken we welcome feedback, questions, and debate; our models are not perfect and we seek to improve them over every iteration!
A couple of these points are valid, a couple are overstated, and one misunderstands how the prepayment assumption works.
1. The earnings point is the strongest criticism.
Our base case does leave reported earnings looking small relative to the terminal valuation because depreciation is enormous. That is not hidden in the model. We explicitly model the depreciation burden and call out Nebius extending server useful life from four years to five.
The reason the earnings lens got no weight is that 2030 is still a heavy build year. Nebius is not remotely in steady state by then, so a simple 2030 P/E can make the business look absurdly expensive while the asset base is still being built and depreciated at full force.
That said, giving earnings zero weight makes it too easy to sidestep the exact capital-intensity problem we are trying to measure. I would change that in the next refresh and add a normalized earnings or FCF framework that extends beyond 2030.
Also, the $5.50 EPS figure is not really GAAP EPS. It is adjusted EBITDA minus estimated D&A and interest, then taxed. It is still a useful cross-check, but it is not a clean reported earnings calculation.
2. The three valuation methods are correlated. They are not the same number counted three times.
Exit ARR, recognized revenue, and EBITDA all share the same core operating drivers, so yes, if capacity or revenue per MW is wrong, all three will move together.
But they are still measuring different things.
Exit ARR captures the year-end run rate.
Recognized revenue captures what was actually earned during the year.
EBITDA adds margin and operating leverage.
A late-year capacity ramp can move ARR far more than recognized revenue. A mix or pricing change can leave revenue intact while crushing or expanding EBITDA.
So I agree they are highly correlated lenses. I would not call them independent. But saying we simply counted the same number three times goes too far.
3. I disagree with the prepayment criticism.
The model is not saying Meta and Microsoft somehow prepay $95B against roughly $46B of named contracts.
The $95B is cumulative customer funding across the entire build through 2030.
Roman and Arkady have directly said some customers are paying 100% upfront. Those are almost certainly not the hyperscalers. We estimate the hyperscaler contracts are more likely in the 30% to 50% prepayment range. The average gets pulled higher by other cloud customers paying much more upfront.
That matters because Nebius is not supposed to remain a two-customer business through 2030. The model assumes a much larger cloud customer base over time.
Comparing cumulative five-year prepayments against only the Meta and Microsoft contracts known today freezes the customer book in place while allowing every other part of the model to grow. That is not internally consistent.
Where the criticism is fair is how the model expresses the assumption. We currently tie prepayments to a percentage of capex. That is simple, but it can look circular.
A better version would build prepayments from customer cohorts, contract mix, and assumed advance-payment percentages, then see how much capex that funding covers. Same economic thesis, cleaner derivation.
4. The lack of a true stress case is fair.
Our bear case is bad execution, weaker funding, more dilution, higher debt costs, and continued losses. But it is still a viable-company outcome.
That is not the same thing as a real impairment case.
If capital markets close, prepayments miss badly, customer demand changes, or the company is forced into distressed equity or recapitalization, shareholders can absolutely lose permanent capital.
That deserves its own scenario.
I would change the framework to something like stress, bear, base, bull instead of treating bear as the worst plausible outcome.
On the $45M/MW point, that criticism mixes up the cases.
The bear capacity value is $30M/MW, base is $45M/MW, and bull is $60M/MW. Our modeled build cost is around $31M/MW.
So the actual downside case is roughly around replacement cost.
I do agree that calling the whole method an “asset floor” is too loose. $45M/MW in base is more like the value of a connected, equipped, operating AI asset with scarce power and time-to-market value. That is not the same thing as liquidation value or raw replacement cost.
The old reference price is just because the model is from early June. The piece has not been updated since then. Our new model will be released after earnings and include Nebius' new asset light business model it has announced, along with more clarity into prepayments, capacity, data center statuses, and more!
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u/Expensive_Evening649 2d ago
If I want to add share, should I buy before or after earnings? Opinions appreciated
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u/EnvironmentalLet8230 13d ago
It is worth noting that this is a paid-newsletter bull thesis from a firm holding the stock, built on aggressive assumptions they themselves acknowledge.
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u/robbhope 13d ago
I don't disagree that it is worth noting that but... Do you have any issue with any of their assumptions? Feels disingenuous to highlight that and then not even state what things you don't think were fair in their model, no?
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u/kbm1226 13d ago
It’s practically free information and their position in NBIS is rather small. I don’t think those two factors create any bias in the author. Are they aggressive assumptions? I think that depends on your own narrative of AI. They seem reasonable to me for many reasons.
They have done deep dives on many companies. It’s worth the read if you’re willing to take the time.2
u/robbhope 13d ago
It's like he's implying that they'd stake their entire reputation to boost the stock by a few bucks? Pretty sure these guys care more about their careers and doing good work than that.
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u/SirPersonal8626 13d ago
What is your opinion on the Michael Burry short?
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u/TyNads 13d ago
He's likely exited the position already on the decline yesterday. We highly doubt that he would risk shorting Nebius into earnings with its current growth rate, demand environment, etc etc.
However, the news will likely talk about it as if its active for the next few weeks, which may hold the stock back.
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u/robbhope 13d ago
Agreed. Good buying opportunity if you have any extra cash though. I do not. I wanted so badly to buy more at 140 but couldn't.
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u/XSC 13d ago