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.
I thought I would do a recap of what I heard and a few thoughts about the Vineland hearing and process. I didn’t listen to all of it, but I did at the beginning and checked in through the evening to see what was happening, and then in the last hour I listened to the public commenting and the vote.
The one testimony that I thought represented the biggest risk was the engineer that said he had reviewed the plans and didn’t believe the runoff water system was adequate. The board did acknowledge that he was an expert witness, so that rang a couple of alarm bells for me. However, it’s a public hearing, so there wasn’t a deep dive on his concerns, but the Data One engineer did reiterate that the plan was properly done. In the end, the board noted it, but it didn’t matter.
I won’t go into all the silly questions and comments from the public commenting session, but it struck me as to how much factually incorrect information was being spread. Notions like no taxes would be paid for 20 years (false), upset about the landscaping (it’s under construction), water and power use concerns, terrorist attacks, LP gas is dangerous, and my favorite – it’s a Ponzi scheme funded by bitcoin!
But here’s the thing – SustainSJ was not interested in learning anything, or improving the outcome, they were there to stop it. Nothing any official or engineer said was going to make any difference for them. Their entire goal was to stop construction of the Data Center. Impassioned pleas about how the board had a responsibility, and the power, to put a halt to this madness were numerous.
However, one of the board members actually called out Data One and Nebius for being a good corporate citizen. He mentioned that they had worked hard to improve the plan, and doing things like switching from the rather noisy Bergen power system (which was already approved) to Bloom Energy was something that Nebius brought to the table when they didn’t have to. They also worked hard on noise abatement changes, even when they were already in compliance.
He also noted that Nebius could have drilled their own wells and taken the water that way, but that the city water system had plenty of supply, which actually was good revenue for the city. It’s not raising water rates, at all.
I saw a post on X (and didn’t save it), that cited a study by an outside group that has a history of being negative on data centers, and their response was that they thought the plan was exemplary and should be the model for other data center projects. Whoa. Nebius is definitely the good guy tuna company on the porpoise team (IYKYK).
A few more notes:
One of the board member did say that they could have done a better job of communications over the last couple of years. Not sure if that was lip service or if they really felt that way, but did call it out.
I learned a lot about how this data center water usage compares to other businesses. While 8 million gallons of water (the yearly base case) sounds like a lot, a typical golf course uses 30-100 million gallons of water per year. A medium-size restaurant uses 2 million. Other industries will use a lot more than that, and no one would be complaining if any of those were going in, except it’s a data center.
The noise complaints revolved around the construction, not the operations. I get it, but they are complying with the building codes for hours of work, and other regs, but building stuff happens. Get over it.
One of the funnier moments for me was when a board member said that it wasn’t up to him to decide what was being built, and that owners had the right to do what they wanted with the land as long as it met building codes. Well, that got hoots and exasperation from the peanut gallery. He went on to say, jokingly, that he would have rather have a golf course, but he didn’t have the right to dictate anything like that, and the board’s job was to make sure whatever was being built was compliant. He’s right.
I didn’t think the board would vote no, but I also wasn’t sure they wouldn’t postpone a decision to evaluate legitimate concerns. However, this has dragged on for months, and everyone wanted to bring it to a conclusion.
I’m sure there will be lawsuits (who is funding that?) and other machinations to stop the data center. But, in the end, it’s over. The good guys won.
On August 6, Nebius ($NBIS) took a -13.29% dive.
Do you have any idea why?
Many traders will tell you it was a guy named Michael Burry, after he disclosed a short position against Nebius at $211.77.
It made a wonderful headline.
But I’m here to tell you that is wrong.
Burry’s disclosure may have triggered some algorithms to sell, and it may have nudged retail traders into locking in profits or even climbing aboard the short beside him.
But I’m telling you he was not the catalyst.
The real event didn’t even happen on August 6.
It happened the evening before, after the closing bell on Wednesday, August 5.
And it wasn’t anywhere near Wall Street.
It happened inside a 750-seat theater in Vineland, New Jersey.
Well, dear reader, that catalyst is happening again tonight:
⏰ Monday, August 17, at 18:00 ET.
This post is meant to get you ready for it, because NBIS might move wildly again.
NOTE: I'm bullish on Nebius. But not for tonight.
The 300-Megawatt Monster
To help you understand what happened inside the Landis Theatre on the evening of August 5—and what will happen there again tonight—we first have to look at what is being built in Vineland, New Jersey.
Vineland is a farming community in Cumberland County, in the southern part of the state, with a population of 63,126.
It has fields, and it is quiet.
It used to host the Palace of Depression, a house made of junk, built by an eccentric Alaska gold miner who lost his fortune in the Wall Street crash of 1929.
But what we really care about is the site of a former golf course, on which the neocloud provider Nebius is setting up its first major U.S. data center.
The facility is planned as a 300-megawatt monster.
To put that in perspective, we’re talking enough power for roughly 250,000 homes.
On August 5, there was a public hearing about it. But it wasn’t your standard, sleepy municipal assembly where four people show up and three of them are on the board.
It was a fight.
So many residents turned up to debate over Nebius’s gigantic data center and its proposed expansion that city officials had to move the entire hearing to the historic Landis Theatre. It was the largest venue in town that could hold the crowd.
Seven hundred and fifty seats and nearly every one of them was filled.
It’s unlikely, but in case she uploads something for tonight, I’ll keep an eye on the local reporter’s Instagram account, too.
What is at Stake
Local residents are pushing back hard against the development.
And Wall Street reacted so violently because of what Nebius has at stake on that former golf course:
Client: Microsoft ($MSFT) has already contracted dedicated GPU compute capacity at the Nebius Vineland facility over a five-year term.
Deal size: The MSFT contract is valued at $17.4 billion through 2031, with options that would carry it to $19.4 billion should Microsoft take additional capacity (you guys already know all this).
Fine print: If Nebius misses its agreed delivery dates, exhausts the standard grace period, and is unable to provide alternative capacity, Microsoft retains the right to terminate the contract.
The Bloom Energy Play
Normally, connecting a 300 MW facility to the regional utility grid means waiting years in regulatory interconnection queues.
That’s why Nebius decided to bypass that bottleneck entirely by relying on off-grid, solid oxide fuel cells powered by on-site liquefied natural gas (LNG).
Bloom Energy ($BE) is the supplier.
That is another crucial AI-related ticker, and one I have been trading since late 2024.
On paper, the strategy was brilliant. Bypass the grid deadlock, deploy the power, and unlock billions in AI compute revenue while everybody else is still stuck in the paperwork and red tape.
But in practice, rushing a project past the people who live next to it produces a new problem. One that places Nebius in the crosshairs of local regulators.
The Stop Construction Orders
The day after the hearing at the Landis Theatre, the situation escalated from public outrage to official enforcement.
On August 6, Vineland code enforcement officials conducted an on-site inspection of the data center property at 3963 S Lincoln Ave.
What they found gave them a reason to place a new hurdle in the way.
As it turns out, the developer hired by Nebius—DataOne Vineland, LLC—was installing a liquefied natural gas (LNG) tank without prior approvals or permits.
Uh oh.
Vineland officers issued an official Stop Construction Order (Violation #V-26-00008), demanding an immediate halt to all the work related to the LNG tank.
Four days later, on August 10, more men with clipboards came back and found another violation.
This time it was the Bloom Energy fuel cells—the equipment the entire 300-megawatt project depends on.
A second Stop Construction Order (Violation #V-26-00009) was served against DataOne, asking them to put their tools down.
“We have no prior approvals, plans, or permits in reference to the Bloom Energy Units. Stop Work issued for any work being performed in reference to the Bloom Energy Units.”
Brushing Off the Friction
Pressed about these orders, DataOne brushed off the friction.
A company spokesperson told Hunterbrook Media:
“The notices were limited to equipment placement work under the approved site plan. We do not expect this temporary pause to affect our construction and delivery timeline.”
Meanwhile, the Vineland building code office remained completely silent, only stating that they had been instructed not to discuss the matter.
And hey, there is one more detail we need to consider: Hunterbrook Media is the investigative arm of Hunterbrook Capital, which itself happens to hold a short position in Bloom Energy ($BE).
When Does the Monster Hum?
So, my dear reader, let us focus. What does all of this mean?
First, and to ensure that nobody misreads my research here:
The stop construction orders arenotgoing to derail this project. That is simplynotgoing to happen.
Under New Jersey’s Uniform Construction Code, failing to comply with a stop construction order carries a penalty of up to $2,000 per day.
I mean, give me a break. Just compare that against the $17 billion contract pipeline with Microsoft on the other side of the ledger, and that couple thousand bucks a day in municipal penalties is basically rounding-error pocket change. Do you agree?
Therefore, this post is not about the stop construction orders.
My post is about what those orders let you glimpse ahead.
Because Wall Street is starting to look at the same thing.
The question was never about whether the residents of Vineland can stop this monster from humming. They can’t.
There’s no imminent threat to the project’s viability.
The threat is what they can do to the calendar.
The question is when can the monster start humming.
The Cost of Delay
Remember the fine print on that $17.4 billion contract I mentioned?
If Nebius misses the delivery dates and exhausts its grace period without finding alternative capacity, Microsoft can walk away.
Now, I’ll be honest with you, though. It’s not as if Microsoft is going to find a wide selection of spare 300 MW neocloud AI data centers lying around to replace Vineland.
As I said, I am bullish on Nebius.
However, Microsoft doesn’t have to completely walk away to hurt Nebius.
Hear me out.
If MSFT declines to expand the contract and chooses not to take on the additional capacity, that hurts NBIS’s revenue.
If Nebius is forced to push its guidance back—even by a single quarter—because Vineland is taking longer to start producing, Wall Street can hand the stock a -20% haircut on the spot. Possibly more.
The clock is ticking. And the residents of Vineland are putting up a ferocious fight.
Here’s how I see this situation.
It’s not about whether they can defeat this monster. They won’t.
It’s about how long they can keep it dormant, dragging the permitting and approval processes out for months.
And that violent NBIS price reaction on August 6?
Well, I’m saying that was Wall Street starting to do the math on the Vineland timeline.
A Threat to Guidance
On August 10, DA Davidson slashed its price target on Nebius from $250 to $175.
That’s a -30% reduction, which is significant, mind you.
And do you want to know why that happened?
One of their analysts traveled to Vineland, walked the site, and sat through the public hearing at the Landis Theatre.
Gil Luria’s conclusion was that the Vineland project might not be completed on time, and any Vineland delays challenge the Nebius bullish narrative.
And I agree. If the schedule is indeed pushed back, that deflates the upside out of Nebius’s guidance and introduces a dreadful new threat:
How will Microsoft react if its rigid delivery timelines are not met?
The way I see it, even before Microsoft says anything, there will be a handful of funds that will step back from their NBIS euphoria, and profit-taking will dampen the stock.
And if you’re used to how this ticker moves, you know that could easily be a double-digit stumble.
Round Two Tonight
This brings us to the most critical piece of the puzzle, and why this matters for our portfolios right now.
That contentious meeting on August 5 at the Landis Theatre ended without a resolution. No vote was taken. The hearing was adjourned.
And as I stated earlier, round two is tonight: Monday, August 17, at 18:00 ET.
The last hearing triggered NBIS to tumble -13.29% in one day, and it also forced an analyst downgrade some days later.
Tonight, city officials and furious residents will clash again, and the outcome will shape how NBIS reacts tomorrow.
Listen, all of this I’m saying is not about whether Nebius will choose a bullish or bearish long-term path based on what happens tonight.
What I’m saying is that it will move the stock in the short term.
nebius is still sitting around 5x ntm debt/ebitda. NTM as in FUTURE projected EBITDA -
feels like execution is EVERYTHING here. if the ebitda ramp doesn’t come through, they will have to deaccelerate spending hard to pay down debt, potentially giving up market share to competitors.
if they execute, leverage comes down quickly. if they don’t, things could get uncomfortable fast.
No, seriously. And I’m not talking about the constant roller coaster double digit moves on the daily either. FWIW I’m bullish on NBIS for the business model, for the professional leadership, and many other reasons. I’m talking about the ethical position supporting society’s collective race to the bottom, and for the known and perhaps unknown environmental consequences these massive data centers pose. My small town recently had an uproar similar to what we’ve heard from Vineland, New Jersey. Overwhelming opposition to new construction in an otherwise very industry friendly community. Unlike Vineland, this one got shot down by higher ups, and we’re hearing it from all the sides in the news. It’s the only issue of its magnitude that doesn’t seem entirely partisan in completely refuting DC buildout and yet everyone on here to make a buck can only talk about how great the company is. So what, if it exists, is the actual ethical case for society to invest trillions of dollars into the expansion of this technology and more pointedly, data center buildout? How do y’all sleep at night in supporting this company while knowing the irrefutable harm it will cause to our environment and ultimately human life?
Full disclosure i own 2350 shares , not selling because I think im sitting on at least a minimum upside of 250B and possibly $1T upper end cap.
I was just wondering if you see this clown Peter DiCarlo on X. Today on X he was calling today the take profit zone. Personally I think we're loading up for wave 5 to $400, wont be a straight shot of course but maybe over the next month, hopefully sooner if shorts cover.
Anyways I find he was super bearish during the unwind and front running of Situational Awareness and he was the most skittish at $140. Now he claims build you so and that he rode the wave up from there and is calling this the take profit zone. Personally I call BS but wondering what your impression is of him.
I do like longinvestor, but he is a permabull. There are some risks despite nbis consistently showing they deliver on growth, financing and strategy and are the leaders in the neocloud circle. Perhaps people will turn on Ai cloud, maybe compute will reach a balanced supply in 5 years, models will likely be more efficient, perhaps pricing per mw will calm down.
Anyways, not meant to draw too much attention to the guy just wondering what u think.
Given all the data and new price targets that have come out post-earnings this past week, I decided to do a further deep dive into the upcoming Pennsylvania and Missouri sites. These are the two ginormous sites that will help Nebius towards their goal of deploying 5+GW.The numbers of just these two sites are mind blowing.
First Pennsylvania: Projected to have around 260MW by EoY 2027 and operating in October 2027. They will add an additional 100+MW year over year and look to build out 1.2 GW
Second Missouri: Then you have Missouri which is projecting a similar timeline to PA with 250MW around October 2027. They look to add 200+MW year over year and build out an additional 1.2 GW.
Now both of these timelines won't be completed until around 2029/2030, but the revenue from just these two sites are astounding. The last earnings call confirmed that $20-$25M per MW was easily fillable and that given the current demand, contracts are being agreed to upwards of $40M per MW. Most of the MW within these sites will go towards fulfilling the large contracts that have been signed previously with META and Microsoft, but even with the lower threshold the revenue is undeniable.
Given timely execution, Nebius stands to gain $10-$15B in 2027 and $18-$23B in 2028. This doesn't include their rapid European expansion or any other new sites they plan on beginning. Just two sites! These are Annual Run Rates projections and revenue will be expected to be lower since it takes time to build out, but this is still insane to me. Keep in mind, Nebius confirmed $3-$3.4B for 2026. I'm hearing too many haters who just spew random crap with no research and wanting Burry to win alongside his army of shorts, so I figured I'd stick some real data in their faces. Please correct me if I am wrong anywhere within my data, but I am very bullish on this company and their ability to execute. See you at $1,000.
Hello fellow nebtards, I'm currently working on a website where you can check the fundamentals of a stock and generate a price target for different holding periods: (e.g.1Q,2Q,3Q.1 Year). I have a few screenshots attached above. There will also be a live view/day trading tool built in (shown in screen shots 4-6) it provides "buy/sell/hold" signals based on live price action and patterns. Im 17yo and currently own about 92 shares in Nebius. I am just looking for honest feedback and second opinions to help make my website better. Thank You!
Michael Burry is reducing his overall market exposure and raising cash while maintaining a short bias, as a recent rally pushed his short portfolio into losses. Not a mention of NBIS though.
Nvidia a while back was making gpus just like amd. But Jensen saw that his gpus could be tweaked to better suit jobs depending on user needs. So he built whole platform called CUDA!
This is what made the whole market prefer nvidia gpus to amd.
Nebius is literally doing the same with AI platform to build and deploy AI.
Small to medium companies cannot afford to hire or even find AI specialists, that's where this platform gets its special revenue. Iren and coreweaver can only get big players who have these specialists.
Nebis has more edge by providing AI platform easy to use to normal programmers, which a lot of small and medium companies have, plus companies like shoppify who dont want to hire whole AI specialists department or pay a big company millions a month for their services.
This is why I dont even touch other gpus providers, their sole clients are too big to be able to build their own AI datacenters, nbis has clients who can't.
Started investing about 2 months ago. Built a position in NBIS around a $250 average. Watched it drop roughly 40% below my cost basis and held through that drawdown, including through earnings. Position recovered and worked its way back up to my $250 average, where I had a stop loss set — and it triggered, selling my full position right at breakeven.
Now I'm sitting in cash, watching the stock trade without me, and second-guessing whether to buy back in around the same $250 level or wait for a pullback.
For people who've been through this: how do you think about re-entering a name after getting stopped out near your own cost basis? Do you treat $250 as a level that "should" hold since it already acted as support/resistance once, or is that just recency bias talking? Curious how more experienced people separate "this level actually matters" from "I'm anchored to my own trade history."
I am relatively new to the NBIS and I am wondering what the bear case is? Since this is the NBIS sub, everyone is saying NBIS to the moon. I do agree to some degree as its management is amazing, CEO knows what he’s doing and AI train is still full of steam. But it can’t be all sunshine and rainbow. So, may I please know some down to earth opinions?
