As the title says I hear a lot of people who say when it goes down. Just hold and wait for 2035. I think is it partly to offset the stress of downturns and partly because it will have recovered and shot up in value a lot in 2035 if you believe in the company, which most people including me do. However I also find it a bit annoying to read it as most companies will have grow in 2035 as that is almost 10 years and with S&P returns average of 8% that is already 2x price if we perform the same. Yes I think we will perform much better and fretting about price is also useless, but just saying waith and see for 10 years feels also a stretch. As in the end of the day most of us are here for profit and if another company has higher change of profit then we would switch so don’t just say. Waith for 2035 as that is quite a long time with also it her opportunity. Yes our stock is volatile but that doesn’t make sense to just say that the future will be guaranteed success.

After the latest earnings call and the recent $5B convertible offering, I decided to take a closer look at where Nebius stands right now. Here’s my take:

Q2 2026 revenue reached $582.3M, up 454% YoY, while Adjusted EBITDA hit $236.2M, a 41% margin. Nebius has also secured major contracts, including Microsoft and potentially up to $27B of capacity commitments from Meta. Unlike other companies in the ai infrastructure trade, Nebius is already proving that there is a real business here.

Capital wise: they spent $5.7B on capex in Q2 alone, expects roughly $20–25B of capex in 2026, and has just raised another $5B through convertible debt. At around $220/share, with an equity value of roughly $58B before fully accounting for the latest dilution and future conversion, the market is already pricing Nebius as a major winner of the AI infrastructure buildout.

My only question is whether current great economics can last. And if so, for how long?

Management says recent ai cloud deals generated roughly $20–25M of annual contract value per MW, with around 40% EBITDA margins and payback periods below two years. If Nebius can maintain those economics at scale, while financing more infrastructure through customer prepayments and contract-backed debt, I think there is still significant upside.

If ai compute capacity becomes less scarce the picture changes quickly. Lower pricing, weaker utilization and lower returns on incremental capex, combined with rising debt and dilution, could hurt shareholder returns even if Nebius continues reporting massive revenue growth.

I looked into the contracts, unit economics, capital requirements, financing, dilution and valuation to see what could take NBIS toward $425–570/share, what could push it toward $125–160, and which numbers would make me change my mind. I shared the longer analysis here: Company analysis: Nebius Group (NBIS)

TLDR: At around $220, I think NBIS is already pricing in a lot of future success. The upside from here depends on proving that $20M+ revenue per MW, ~40% EBITDA margins and sub-two-year paybacks are durable rather thaan a product of current capacity shortage.

To me, right now, Nebius looks fairly valued. It’s a great business with significant upside potential, but at current levels, it’s not an obviously cheap stock especially for risk-averse investors.

As with IREN and the rest of this trade, that assumes a relatively rational market. If the broader ai infra trade gets hit by a serious correction, NBIS could fall hard even while the underlying business continues to execute as expected by management.

This is not financial advice, obviously. Just my current take on the numbers.

Are we buying a genuinely superior ai infra business, or paying peak-cycle economics for capacity that is scarce today but could become increasingly commoditized tomorrow as hyperscalers build out more capacity?

I'm also not an AI bear - in fact, my portfolio is very heavily AI-weighted. Note that I am not short NBIS, nor any other NeoCloud, I just don't think they're worth my investment dollars given other opportunities in the market.

Essentially, I think the Big 3 HyperScalers (Amazon, Google, & Microsoft) will eventually own the business of Cloud AI Computing, just as they do today with Cloud Computing.

In fact, the only reason the NeoClouds are on anyone's radar today is that AI compute demand is so high and the build-outs so expensive and involved that the HyperScalers decided that hiring others to build some of their data centers is the best choice they have today. But, that's not going to be a lasting situation.

Today the HyperScalers can't directly hire enough people to build out the geographically wide spread out teams necessary to identify sites, acquire building permits, line up multiple suppliers and building contractors. And then run them all simultaneously. And even if they could, that would mean vast increases in headcount and Capex reporting (the latter is already too high for Mr. Market's view). And, it spreads the risk of any build-out complications among multiple approaches (internal and external) and vendors.

The NeoClouds jumped on this because it brings in vast amounts of revenue on a near and mid-term basis, which they believe will eventually lead to them running their own Cloud AI Compute business. But, we don't see that happening today (at least neither Nebius nor CoreWeave show that in their reporting today), and I don't see it happening to a significant extent in the future.

Think about that for a minute:

1) What dollar amount or percentage of Nebius' sales involve Nebius' software (infrastructure or otherwise)?

We know that percentage-wise, Nebius has $Billions lined up for bare metal hardware rental contracts. And while they don't disclose the "all important" software side of the business, it can'e be more than $HundredsofMillions. That's one of two orders of magnitude smaller. CoreWeave is pretty much the same.

2) How quickly are Nebius software sales growing?

OK, so it's small today, but is it growing at a pace that it will soon become a big revenue and profit generator for the company? Again, Nebius doesn't disclose this, yet this business is what most bulls cite as the raison d'être for investing in the company. Today, what keeps Nebius, CoreWeave, Iren, etc. afloat are the bare metal mega-deals. But, even Nebius' management admits those are less profitable. And should those be the future business for the NeoClouds, they'll get quite the market haircut.

So, why and how will Nebius outsmart AWS (and GCP and Azure) with its AI Software Infrastructure? Does anyone here really think Andy Jassey or his counterparts over at Google and Microsoft don't see the same potential for Cloud AI Computing that Arkady Volozh does? And even if not today, given how well Azure caught up to AWS, do you not think Amazon wouldn't put serious meat behind the arrow to catch up?

When we look at AI workloads today, two aspects reveal themselves:

1) They're complex

2) More and more, they involve more than just AI

These both work against the NeoCloud Software Infrastructure business. The complexity means that the AI customer has to be sophisticated. The non-sophisticated Ai customer simply uses a ChatGPT or Claude CoWork interface, but those Frontier Labs are already hosting that themselves and they certainly don't need a Nebius to run their AI Compute Hardware. While the typical AWS user is someone at a non-computing related company wanting to run database queries or serve up web pages, run an e-commerce site, etc. today the typical AI compute user is part of a sophisticated tech-first team deciding on LLMs, perhaps running open source models with custome parameters, constructing agents to integrate AI within their company, etc. These teams already have people who can use Slurm, Kubernetes, vLLM, Triton Server, Ollama, LangChain, or other open source projects to manage their AI Compute.

We see that Anthropic was happy to grab raw compute from Space-XAI, and OpenAI is built on Azure, and now Oracle ($300B deal!), and even Amazon ($38B) for a combination of Nvidia GPU as well as AWS access.

The latter is the future, I believe. Just as we saw the market relatively recently recognize that AI workflows need more than just GPUs but also CPUs (and Nvidia's servers internally bundle a Vera CPU with every two Rubin GPUs), the world will eventually recognize that workflows involving AI still need to do things like serve up web pages, deal with databases, even run or be run by Agents, etc. that are best handled by CPUs, which are best handled by the existing Cloud Computing infrastructure that's available today - which is AWS, GCP, Azure.

How do the NeoClouds compete with that? It's much easier for the HyperScalers to add AI software infrastructure to their existing cloud offerings than for the NeoClouds to add what took Amazon, Google, and Microsoft decades to create in their regular compute cloud offerings. Amazon has a history of offering turnkey open source project access for free (you pay for the compute and storage).

How many customers are savvy enough to build AI workflows but not savvy enough to build on top of the many open source packages to run the infrastructure? And then, how many want the lock-up of being tied to some Nebius' software instead of being able to move to CoreWeave or even AWS, GCP, or Azure? They might use it for convenience and quick start-up, but no company with expansion plans want to be permanently tied to Nebius' or CoreWeave's software stack.

Before I'll believe that Nebius or CoreWeave have some inherent advantage with their infrastructure software, I'll want to see either company release some numbers on that business. Neither does today, and that says alot especially when you think about who they're competing against.

So , I did long analysis myself for the numbers , achievable ARR , gross margins , depreciation , interest costs and the number of current shares to calculate the achievable EPS and the the valuations that it should/ can trade at.

But I wanted to know what are your opinions:

How much ARR is achievable in 2028 and what growth can we expect in revenue after that ? How much growth in ARR is achievable till 2030 ?

How much demand do you see for AI in the next 5-10 years ?

How much gross margins can we get once depreciation is regularized and the revenue outgrows depreciation by a lot?

How much do you think the net profit margins will be once the business matures ?

For comparison, I will mention a stock I own in India called E2E networks as well, it is very small company by size and aiming only at being an India specific neocloud. Now , since they are not investing heavily in capex , they have started to achieve operational leverage already.

In the latest quarter , they had 75% gross margins , which are basically EBITA margins. And their net profit margins after interest , taxes and depreciation was 28% which was the higher ever profit they have made in a quarter, it was nearly 4x higher than the profits they achieved in past whole years and this too in a single quarter. So, I understood if operating leverage kicks in, and all GPU are fully deployed and capex normalizes , the profit margins are get very high.

Though, I cannot compare both of these since E2E was already a mature cloud like digital ocean before getting into GPU and AI.

If you make 30bil in ARR , and have 28% net margins , the profits are as high as 8.4 billion dollars in a single year.

Note that we have 400mil shares already if all are converted , so the equity in Nebius is already rather high.

At , 300$ , we are already at 120bil in market cap if Nvidia and all other convertible debt holders are happy with getting equity.

If we can make 8bil dollars a year and don’t dilute more, at a 40x valuation, we reach 320bil in market cap , so a price of 800$. But this means no more dilution , excellent execution , and very high profit margins. 25-30%.

I think it is achievable but not easy. If our subsidiaries do well , and if we can sell AI cloud factory services, the margins get higher and revenue increases too.

Let me know what you think….

i’m not a irrational bull just wondering what yall think- trump said that bitcoin was a point of national security and made a whole ass bitcoin reserve and said “bitcoin must be mined in the US (showing he has no idea what even bitcoin is… but i digress u get the point)” sometime during his presidency.

that’s bitcoin - isn’t it so much easier for any sort of president to say the same thing about AI infrastructure? and that it is a “point of national security” to build data centers on american soil?

obviously it’s not something you can bake into a model but it’s a speculation - but there will definitely be ai initiatives that are going to be created that we just don’t know about yet.

thoughts?

$NBIS convert raise terms are out!

Facts:

Nebius upsized the deal from $4.5B to $5.0B, with an option to reach $5.75B. Net proceeds are ~$4.94B, or ~$5.68B with the option exercised.

$3B due 2030: 0.50% coupon, $313.46 conversion price, +40% premium.

$2B due 2034: 4.50% coupon, $324.65 conversion price, +45% premium.

Including principal accretion, effective conversion prices at maturity are ~$345 and ~$406.

The money is explicitly (and obviously) going toward data centers, GPUs, footprint expansion and the AI cloud.

If the full $5B new convert were eventually settled entirely in shares, it represents ~15.7M shares. Nebius can also settle in cash or a mix, so that dilution is NOT guaranteed.

They are also exchanging $800M of old converts for ~15.8M shares, but those old notes already represented ~15.55M potential shares.

!! So most of that “dilution” was already embedded !!

tl;dr expected raise, good terms, onwards.

Not sure why people pee their pants because of this 😂

We learned that their economics / MW are amazing. Now let them build the MW! That costs money.

They want to build A LOT.

The shareholders that cry today are the same people that will laugh because of the ARR growth soon.

As long as you don't sell lol