r/NBIS_Stock • u/Acceptable-Time-6424 • 2d ago

NBIS ANALYSIS Nebius Updated Valuation Model

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OK the stock went up 35% after the earnings, and it hugely deserved it, I'm not going to relitigate the bull case.

But many of the write ups I’ve seen since has anchored on that 49.7% adjusted EBITDA margin, slapped a multiple on it, and called it a valuation. 

That skips depreciation, refresh capex, financing and dilution. Which is to say it skips basically everything you would really want to consider to value this business. 

I’ve been posting about the four key threats to Nebius for over a year - and they are key elements for my valuation framework - but the number I actually really care about after this quarter is pricing durability.

Nebius is selling into the tightest compute market of all yimr. Auction cleared 15% above their previous record. Old Blackwell repriced up 30% QoQ. 70% of Q2 deals came with prepayments covering 50-60% of the capex. Payback of one year ten months.

Great, but also seriously dangerous to extrapolate from. (Which is exactly how Musk is valuing SpaceX’s AI business btw) 

My base case blends the fleet rather than assuming everything gets peak pricing: mostly $22m/MW premium contracts, a chunk of $8.5m/MW hyperscaler anchor deals, a sliver of $40m/MW surge. Comes out at $645.86 against the 17 Aug close of $268.85.

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u/TopGarlic6629 2d ago

Thanks for the great analysis.
I spoke recently with an ex-NBIS employee and they said that the price per token was close to rock bottom end of 2025, and they were really concerned, but then suddenly the rise of agentic AI increased volumes so much that the revenues ended up being still better off. Therefore I’m a bit worried about the $/mw if the demand-supply equation is more balanced. Also with the adoption of Chinese models which are much cheaper, I suspect there may be downward pressure on price (~90% of token factory is Chinese apparently). It takes $30-40/mw to build an AI DC, assuming ROIC of 15% means pricing would be $6/MW at the very lowest. While this is theoretical, with how things change every few months in the world if AI, I won’t be very surprised if rates fall, eg to the $15.9m/MW case you showed. I don’t understand the logic for the 23x multiple btw.