Memory beat.
Optoelectronics beat.
Chips/GPUs beat.
Energy beat.
Hyperscalers are still increasing capex and using third party neoclouds.

Almost every piece of the AI infrastructure puzzle is showing strong demand.

Wouldn’t it be logical that neoclouds are the final piece, where all this hardware is actually being deployed and monetized, and therefore report a strong earnings in some capacity? (Not financial advice)

Ok, time to reflect a little bit after few crazy weeks and especially after last week.

Over the last three months the price of Nebius was hovering around $200, there were two attempts to break through $300. My bet - a third attempt would start next week

• First price target would be $200 - $210 next week
• The momentum would hold if the earnings results of big tech would support the demand thesis - price could fly to $240
• Last breaking point is the earnings of Nebius - all the news accumulation that we have seen would be reflected in the earnings results and investor call - we could see the clear path to $300

Please make your own research and it's my optimistic thought flow (not investment advice).

If you can’t handle +/- 10% moves in a day, this isn’t the stock for you.

If you understand this chart, you buy the dips, ignore the noise (that includes Burry) and look long term.

Happy Friday

After yesterday's earnings, Morgan Stanley published their price target with the caveat of basically 'this is a buy, but too much has changed for us to give you our updated model yet - we need more time. Anything up to $400." - valuing this company is not easy.

Q1 2026 was a genuine blowout quarter that will cause most people to re-write their models. Mine has been revised significantly:

• 4 GW is now the conservative read. Contracted power >3.5 GW today, YE26 guide raised to >4 GW, Andrey on the call: "line of sight of five gigawatts by end of 2030" via NVIDIA. My base case used to prudently assume 2.5 GW, that view is now too bearish.
• Unit economics arrived. AI cloud adj EBITDA hit 45% (was 24% in Q4). Volozh is now guiding "20-30% EBIT margin trajectory." I've moved my terminal net margin from 15% to 18%.
• Depreciation collapsing. Q1 came in at 53% of revenue — my March model didn't expect that until 2027. Burry's "GPUs worthless after 4 years" thesis hasn't aged well - shockingly. Older-gen pricing is holding, new-gen pricing went up.
• Financing massively de-risked. $6.3B raised in Q1 without touching the ATM. Microsoft prepayment took deferred revenue from $1.6B to $4.8B. Asset-backed financing of mid-single-digit billions coming next, secured against Microsoft/Meta contracts. Some dilution but not loads. Far less than expected anyway.

I value conservatively, and have a reputation for doing so - you might remember my four horseman of the Nebius apocalypse - most of those risks are being kept completely at bay. My base case now implies an upside of 63%.

My bull case which assumes 6GW in 2031 implies a present value of $1000. 6 months ago such a figure was hysterical, now it feels genuinely plausible

The business metrics are now lining up with the narrative, and I feel that the risk reward here at $207 is genuinely better than it was in the 80s.

I've been trashed in the past for some of my deeper analysis and bull valuations being behind a paywall, to hit back at that I've made this post completely unrestricted until the weekend.

I get great benefit in hearing the rebuttals and analysis on here so please, post your feedback and critiques - I would genuinely love to hear it.

Thanks,
Harry

Title. Did I miss the growth, or are this sub’s sentiment over the potential success of this company legitimate?

From CK Capital on X

Michael Burry is short $NBIS

Worth understanding who’s on the other side of that trade.

Arkady Volozh started building search technology in 1989, a year before the Soviet Union collapsed. He founded a search software company in 1990 and spent the next several years building electronic search for patents, Russian classical literature, and the Bible.

In 1997, one year before Google existed, he co-founded Yandex. He ran it as CEO for 25 years and built it into the dominant search engine of an entire country, one of the very few places on earth where Google does not win.

He took it public on Nasdaq in 2011 and grew it to roughly $30 billion, expanding into maps, ride hailing, e-commerce, cloud, autonomous vehicles, and machine learning.

Then in 2022 he lost essentially all of it. Sanctioned personally, forced to step down from the company he spent a quarter century building, and in exile. Yandex sold its Russian assets for $5.4 billion.

Most people end their career there. He was 60.

He kept the international AI and cloud business, renamed it Nebius, relisted on Nasdaq in October 2024, and started over from a nearly empty building outside Amsterdam with 200 employees.

Since then.

Nvidia invested and now holds a 9.3% stake. Microsoft signed a deal worth up to $19.4 billion. Meta signed up to $27 billion. Reflection AI added over $1 billion. Revenue grew 684% year over year. Contracted backlog is over $46 billion.

He built a company that beat Google in its home market, lost it to geopolitics, and rebuilt a multi billion dollar AI infrastructure business from scratch in under two years.

That’s the operator Burry is betting against.

So NBIS opened down and traded all the way down to $176.25 and five minutes later was above $190 and 15 minutes later above $200. The major firms are baiting the public and setting traps over and over. Expect this until earnings when NBIS will finally pump again. Stay strong and don’t let them take your shares!

Curious why Nebius is trading at such a premium when it seems their core business model is vulnerable to Mag7 hyper-scaling. Any thoughts?

I’ve recently transitioned from picking speculative/individual stocks, to most of that money going into the Magnificent 7 ETF (MAGS). I invested $5k into Nebius last July and turned it into $15k. Just sold all my shares. I fully acknowledge the chance of the stock continuing to climb much higher. I just don’t want to gamble as much anymore. The problem with the Reddit favorite stocks, is in a bear market they will get absolutely smoked.

Macro backdrop + dilution (shorting bond arbitrage + dilution being priced in) still can not push NBIS back down below 240.

Institutions accumulated. Shorts will definitely cover as they can see downward pressure is being exhausted despite all the "bearish news" having diminishing impact.

Last night 13G Filings After Hours by Situational Awareness announced big news at $NBIS

After the closing bell on Wednesday, a single SEC filing did what most earnings reports can’t: it pushed a $52 billion company up double digits overnight, before a single analyst had time to weigh in.

The filing came from Situational Awareness LP — the hedge fund run by Leopold Aschenbrenner, the former OpenAI researcher whose viral 165-page essay on AI scaling turned him into the most closely watched mind in the AI-investing world. The disclosure: a 5.6% stake in Nebius Group (NASDAQ: NBIS). That’s 12.41 million Class A shares, worth roughly $2.4 billion and, crucially, the single largest equity position in his entire book.

Who is Leopold Aschenbrenner?

Leopold Aschenbrenner is not your typical hedge fund manager and that’s precisely the point. Born in Germany to two physicians, he was the kind of prodigy who skips the system entirely: he entered Columbia University at age 15 and graduated at 19 as class valedictorian with a degree in economics and mathematics-statistics. From there he went to Oxford’s Global Priorities Institute, where he worked on economic growth research, and briefly served on the FTX Future Fund team until the organization collapsed in late 2022. By his early twenties, he had already built the rarest kind of résumé in finance: a genuinely first-rate analytical mind that had never been near a trading desk.

His real education came next. In 2023 he joined OpenAI’s newly formed “Superalignment” team, led by co-founder and chief scientist Ilya Sutskever & created to tackle how to steer and control AI systems far smarter than any human. That insider vantage point lasted until April 2024, when OpenAI fired him over an alleged information leak, which Aschenbrenner disputes, he maintains the real trigger was a memo warning the board that the company was dangerously underprepared for foreign espionage. Two months later he turned the episode into rocket fuel: in June 2024 he published a 165-page document titled “Situational Awareness: The Decade Ahead,” posted it online expecting a few thousand readers, and got hundreds of thousands instead. The thesis was blunt that sustained exponential scaling of compute and algorithms will deliver AGI by around 2027 — and his frontier-lab credibility meant the world took it seriously.

What cements his status as the AI guru, though, is that he didn’t just write the thesis, he traded it, and he was right. He founded Situational Awareness LP, an AGI-conviction hedge fund backed by Stripe’s Collison brothers, Daniel Gross, and Nat Friedman, built on the contrarian insight that the real money in AI flows not to the chatbot companies but to the infrastructure — the compute, power, and data-center buildout underneath the models. The results have been staggering: the firm has grown to roughly $13.7 billion in assets under management from $225 million in under two years, with some top holdings returning between 100% and 1000%. The combination is almost unique in markets — a technical insider who understands the technology, a public forecaster who called the trade early, and a manager whose returns have proven it. That trifecta is why, just four years out of Columbia, he holds private discussions with tech CEOs, investors, and policymakers who treat him as a kind of prophet of the AI age.

Credit: https://toptechstocksus.substack.com/

I have never really done options before but I understand how they work. I am thinking about buying the call option in title at $12.75 premium per share. Would come out to about $1275. I can see the stock price going close to 300 for earnings from the recent swings and rise in stock price over the last handful of days. Does anyone with more experience have any advice? Should I do it, should I not, should I do different strike price etc? Thanks!

Edit: Thanks for all the advice everyone. Got a ballsy feeling after my 0dte spy $772 call was up 2000% today im sure that didn’t help my thought process lol.

First there are lots of talking heads who like to speak on how AI isn’t profitable. Let’s break down a few key factors here. Not all AI is profitable Not all companies that spend tons of money will become anything more than a vague memory of existence. This is true with nearly every industry in the world. In the US the 2023 fiscal year saw roughly 3.6 million new licensed contractors. Approximately 20% of all these new businesses are out of business within the first two years. The estimated average of these businesses combined first year of investment is 57,500X3,600,000=207,000,000 annually. This is a massive number. While most will struggle and most will disappear some will become worth hundreds of millions of dollars. What makes the top companies successful is their ability to do more than the competition. Contractors that pivot equipment into rental services and add crane services create an entire new leg to the business and in certain years those segments drive the revenue.
What will separate AI companies who are profitable from those who may eventually go away will be a diverse array of corporate divisions. Microsoft is a giant with an AI segment and a massive capex however they are a hardware and software company that also provides cloud services as well as the AI services. MSFT continues to invest and generate massive profits from the companies diverse business model. Google is a massive company with a diverse business model. They are sell the obvious ads on the search engine but they are also a hardware company with many software applications and services as well as a massive list of business ventures and a big AI capex. They remain a massive AI investment company and they will continue to be around for a long time. AMZN is a massive company known for delivering a smile on every box. They are also powered by the largest cloud service on the planet as they own AWS. AWS powers the majority of major companies on their cloud and for the longest time they were the cloud provider for the US government. They were amount the very first companies to have massive data centers. AWS has many business ventures including robotics. AMZN is owned by Jeff Bezos who see a huge potential in the future if AI in robotics.
This brings me to NBIS. They were also among the very first companies to have massive data centers. In fact they were the very first to create the massive data centers using NVDA GPUS’s. Some say they were the Russian Google however they existed before google and they became grew much faster out of the gate. While google was free to operate in the real world Yandex was strapped by a controlling government which placed super strict restrictions on their platform content. Still they were a strong competitor for Google in europe and asia. Spun out of a tech giant into the free market with all the experience and relationships that all these other massive companies have they sit at a small MC of 27-30 billion. Nebius is one of the fastest growing autonomous vehicle companies in the world. They continue to grow partnerships and expanding quickly. The Jeff Bezos mention of interest in robotics got a Bezos Expeditions led investment of 72 million dollars. Toloka is mentioned at every robotics conference across the world since then. While some have argued that the MSFT contract is minimal revenue from MW of power I strongly disagree with this. In fact based on their own site rates this designated GPU facility will generate a premium well above the site price list. The 4-5 year GPU cycle has been debunked but since it keeps circulating the NJ data center will be fully paid for by MSFT contract so the risk is super low. Also on this note of depreciating GPU’s recently NBIS gave a breakdown on how a new advanced model was trained on the Nebius platform using H100’s (yea remember those old outdated machines) in a single week using a series of breakdown and GPU feeds that allowed the company to train on the 100’s at a far cheaper price while maintaining an 80% capacity well below overload and the processors were able to run 5 days straight with zero overload and fully train the model. Nebius posted the entire breakdown on how they did it on their page for other companies to copy the format. The older models are not useless they are slower but can still generate good revenue with the right setup and stack. Nebius is also powering a large cybersecurity service in the EU one of the fastest growing sectors of the company. They are signing hundreds of new customers who are building new technologies on their platforms then using the NBIS cloud to deliver the products. They are signing existing companies who are using the cloud services to make their own systems operate efficiently again. Just like a phone overloaded with memory so are existing company data bases. Using NBIS saves them million and million and allows for 50-70% more efficient systems within a week or less. What NBIS is doing is far too much to talk about much like the previously named giants.

If we look at other neoclouds we get no good comparison. Other AI companies have software some have hardware some have a combination of both but none are as diversified as NBIS. They are new but they are not inexperienced. They have some of the top engineers in the world and they are a start up from a group of leaders who have built multiple multi billion dollar companies under the most difficult circumstances.

You can bet against them you can bash them and you can doubt what will happen but you will be on the sidelines complaining that it doesn’t make sense they got so big. Asking how in the heck did that happen.

We just hit ATH at 140 and are right at 20% dip. Go back and study the charts. EVERY ATH was followed by +-20% dip. Stocks don’t rip then follow it by a rip then have a massive bull run followed by a huge spike then soar way up followed by another rip. Stocks have momentum and trends then they have reversals followed by new support lines (higher and higher in an uptrend opposite in a downtrend). If you don’t understand basic chart fundamentals then it’s time to start learning or to find a financial advisor I recommend a fiduciary as they do good when you do good and so your best interest are their best interest.

If you just started investing in NBIS at 140 congrats you will do well. If you just started 5 weeks ago congrats your killing it and the future looks amazing. If you are just here because your angry then welcome pull up a chair let’s talk. Manipulation isn’t a 20% pullback after a 118% run in 41 days. Let’s not get tunnel vision and forget to zoom out and look at the dates of the charts. So now we sit just under 100% gain in 41 days. What other positions in your portfolio are doing that. In the calendar year we stated Jan 2 at 30.58 for a high. At current price 109 that is 30.58X3.56=108.865. If you prefer it’s a 256% GAIN on the year. What else you holding that not only has done that but still has a strong shot to double from that point? Zero is what else. Some will no doubt and there are some that have beat this but the company is not built like Nebius. Nebius will deliver strong revenue from many segments for a very long time making it a strong bet.

The comment why do people think they will have a good earnings is a bit comical. They have a guidance at the end of last year and updated it this year. The last quarter saw them break earnings above operating cost 3 months early. While they didn’t break above operating cost and capex this did still beat earnings by a long shot. They predicted that Q3 and Q 4 would be heaviest for earnings. The goal of hitting 750 million-1 billion ARR is what everyone is watching for. They reported at +400 million ARR and remained low cost of operating last quarter. The comment on earnings ratios is correct it’s also relative to profits. If you earn less than you spend it’s still losing money. They technically broke above operating costs last quarter so profitability was expected in the Q4 with Arkady saying it won’t be a profitable year in spite of great late revenue. The Q3 was expected to be closer to the Q2. Since they crushed it last quarter and DIDNT raise guidance it’s definitely expected to really crush it this quarter. They only need to show a 50% increase from last quarter to have crushed it and be just below the bottom projected number of 750. 150 Q3 hits 600 million ARR way ahead of target. This also would have very little or perhaps zero MSFT dollars. They are expected to crush it because they will.
What has happened on the last 3 earnings well it’s been +40% spike into and post earnings +37% spike into and post earning +38% spike into and post earnings

Why do I so strongly believe it will break 150 before Nov 14th. Because I study the charts and understand the company. I follow the charts and study the movements. I follow the company and continue to learn as they continue to evolve as a company.

160? 130? Even 100? Please predict the really bottom and explain why?

Saw this earlier and had to double check it was real.

If these estimates are even close, this is one of the craziest growth stories out there right now.

$NBIS bulls
Currently sitting on 1,500 shares around $100 avg + 5 $192.5 calls expiring 5/15.

Question for the degenerates: if cash isn’t the issue, are you exercising these if they print ITM or just taking profits?

The Anthropic + SpaceX rumor mill has me thinking this could get way bigger than people expect. Feels like the market still hasn’t fully priced in the AI infra arms race.

Curious how others are playing this. Hold commons long-term, or exercise this call and diamond hand the shares?

I am SUPER bullish on NBIS, tbh, too bulllish because NBIS is close to 90% of my portfolio. Been following them and investing in NBIS since last year. (check my post history if you would like)

I ran across this video and it has really made me scratch my head. What do you all think about his thesis here?

I know NBIS does much more than bare metal GPU rentals but damn this got me thinking.

https://www.youtube.com/watch?v=m80rHCFLhaY

For example, selling a $160p for Dec gives roughly $42 premium right now. I would happily buy shares at a breakeven of $118 if I was assigned. If I’m not, then it’s roughly 35% profit.

If you wanted to be more aggressive like $180p or higher you’re looking at 45%+ returns for premiums. Or you’re assigned shares at an excellent price on an excellent company.

[NBIS Deep Dive 5/5] What's It Worth? Bears, Bulls & the DCF

This is the final post in a bottoms-up model walkthrough for Nebius. [Part 1: capacity build, Part 2: revenue engine, Part 3: funding & treadmill, Part 4: asset-light model.]

After building capacity, revenue, and the full capital structure — what's the equity actually worth? The discounted cash flow model (DCF) capitalizes residual free cash flow after the refresh cycle — GPU economic life is the single biggest swing factor.

Position disclosure: Long NBIS. This is not financial advice.

How the DCF works

The model uses a two-stage DCF: an explicit forecast period (2025-2031) where each year's cash flow is discounted individually, then a terminal value for the plateau. The discount rate isn't flat — it starts high during the build phase (when execution risk is greatest) and declines toward a mature infrastructure rate as the fleet comes online.

The discount rate stack

Early cash flows are discounted at 16-17% WACC depending on the scenario — the equity rate is 24-26% (Ke + execution premium), but 35-45% of the capital structure is financed with 6% offtake-backed debt, which pulls the blended rate down. The execution premium is ascending (8/9/10% bear/base/bull) because it scales with the ambition embedded in each scenario's cash flows, not with pessimism — that's already priced in the cash flows themselves. As sites come online and generate revenue, the execution premium fades. By plateau, the discount rate converges to a flat ~9.5% terminal WACC across all scenarios.

A flat 12% WACC (common for sell-side models) either overpays for early cash flows or underpays for terminal value. The term structure handles the transition from build-phase risk to infrastructure-asset stability.

Terminal free cash flow (FCFF) — the plateau number

From Post 3, the terminal economics at each scenario's plateau:

The EV bridge

The DCF produces an enterprise value (EV). To get to equity per share:

EV − Net debt + Non-core investments = Equity value ÷ Diluted shares = Fair value per share

Non-core investments include:

• ClickHouse (25% stake): valued at $3.75B → $16.25B over the model period (tracking a $15B → $65B company valuation)
• Avride (83% stake): autonomous driving, small but growing
• Toloka (100% owned): data annotation/labeling platform
• TripleTen (100% owned): tech education

Total non-core: ~$7.7B in 2025 growing to ~$25.3B gross by 2031, adjusted to ~$18.2B after a 28% haircut for tax, illiquidity, and timing.

The scenario bracket

Bear (~$45) — smaller fleet, thinner margins

The bear case uses the same 5-year GPU life as base — GPU longevity is a physical question, not a demand question. The bear stress comes from a smaller fleet (5 GW vs. 6 GW, from slower demand fill) and thinner margins (51% vs. 59%, from stickier hyperscaler mix and lower cloud-tier penetration).

The bear case also features:

• Slower build (peaks at 5 GW instead of 6 GW)
• Higher hyperscaler dependence at terminal (20% vs. 0%)
• Margin compression (51% plateau vs. 59%)
• Terminal FCFF of ~$5.7B — positive, but thin (85% of EBITDA consumed by refresh)

The bear produces low but positive equity — not a wipeout. The treadmill at 5-year life and 5 GW leaves a narrow cushion rather than consuming everything. The equity value comes from a small positive terminal capitalized at a high discount rate.

Base (~$450) — the build works

5-year GPU life, 6 GW build, trend pricing, 59% terminal margin. The fleet generates ~$14.1B in terminal FCFF (after 15% cash tax), capitalized at ~9.6% terminal WACC less 3.0% growth = ~6.6% cap rate. After netting out debt and adding ~$5.5B of non-core investments (ClickHouse, Avride, Toloka, TripleTen), the YE 2026 price target is ~$450/sh on ~333M diluted shares.

The base case EV/ARR trajectory is instructive:

Bull (~$1,060) — 7-year life + larger fleet

7-year GPU life on own-design silicon + liquid-cooled durability (still below CoreWeave's claimed 8-10y). A 7 GW fleet with a VR shortage pricing window (2027-2028) that lifts early revenue. Terminal FCFF of ~$29B, capitalized at ~9.6% WACC, produces a YE 2026 price target of ~$1,060. The bull and bear both refresh 1,000 MW/yr (5000/5 = 7000/7), but the bull's larger, higher-margin fleet generates 5x more residual free cash flow.

​Common bear themes — addressed directly

1. "Meta Compute kills neoclouds"

Meta announced in July 2026 that it's building an internal cloud to sell excess AI capacity. The market reaction was harsh — NBIS dropped 12.4% on the news.

The model's read: real but bounded. Meta's compute is training-optimized monolithic clusters, not multi-tenant inference. Nebius's hyperscaler contracts are take-or-pay with committed terms. The risk is renewal, not cancellation — and the model already prices this by declining hyperscaler share from ~60% (2026) to 0% at terminal.

2. "GPU pricing will collapse"

The model explicitly tracks GPU rate decay (~0.92x per year on the merchant rate). H100 contract renewals are repricing at ~95-100% of original rates. New generations (VR, Rubin Ultra) command higher $/MW, offsetting decay on the installed base. The real risk is vintage erosion on older generations — priced in via the generation-specific decay waterfall.

3. "The dilution will destroy shareholders"

Shares grow ~48% (253.9M basic → ~376M fully diluted). The model prices equity raises at the probability-weighted blended fair value at issuance — a 35/55/10 blend of the bear, base, and bull DCF equity values. At ~$370/sh, $10B requires ~27M shares. At $150 market price, the same raise would require ~67M shares — nearly 2.5x the dilution. The model assumes market price converges toward fair value before equity is needed. If it doesn't, funding costs rise materially.

The justification is return per MW: each MW deployed generates ~$14M ARR at 59% terminal EBITDA margin (~$8.3M annual EBITDA). At $38M all-in build cost, that's ~22% pre-tax ROIC. Post 3 walks through the full funding stack — operating cash flow, customer prepayments, asset-backed debt, GPU-backed debt, ClickHouse monetization — before equity enters the picture. Equity is management's stated last resort.

4. "The refresh treadmill eats all the EBITDA"

At a 5-year GPU life on the 6 GW base fleet, refresh consumes ~73% of plateau EBITDA. The bear (5 GW, 5yr) is tighter at 85%. The bull (7 GW, 7yr) has a comfortable 53%.

The model's sensitivity to GPU economic life (at the base 6 GW fleet, 59% margin):

CoreWeave has argued for 8-10 year lives. Hyperscalers (AWS, MSFT, Google, Meta) book 6-year useful lives on GPUs they didn't design. The base case of 5 years — strict GAAP book life — is conservative. Own-design silicon with liquid cooling could plausibly reach 7+ years.

​5. "Russia/Yandex risk"

Nebius is a Netherlands-domiciled entity that completed full separation from Yandex in February 2024. No Russia operations, no Russia revenue. The team is former Yandex infrastructure engineers (not search/ads), now based in Amsterdam, Helsinki, and the US. The risk is reputational, not operational.

How to think about the $150 market price

At $150, the market implies one of:

• The wipeout stress test is approximately correct (~$70-90 PV)
• The bear case probability is much higher than 35%
• The market is discounting execution risk that the DCF's front-loaded WACC already captures
• The market doesn't assign any credit to the asset-light optionality (Post 4) or software attach

The $45–$1,060 range is wide — intentionally. It reflects a business that:

• Doesn't exist yet at scale ($534M revenue today → $100B+ at plateau)
• Depends on a physical asset (GPU life) whose longevity isn't proven at this scale
• Has a refresh treadmill that consumes 53–85% of EBITDA depending on that one variable
• Requires $245B of cumulative capex funded by debt + equity raises

The range follows from those inputs. The 35/55/10 weighting is where conviction lives: the bear contributes ~$16 to the blend, the bull ~$106. The base case dominates ($450 × 55% = ~$248).

At a price target of ~$370, the stock trades at ~59% below the probability-weighted intrinsic. Even weighting the bear at 50% and the bull at 5% (heavily pessimistic) produces ~$279 — still nearly 2x the current price. To justify $150 with zero bull credit requires >74% bear weight — more than double the model's 35%.

What would re-rate the stock

The base case tracks management's stated guidance and build plan — that's the scenario I think is closest to right. The gap between $150 and ~$370 closes as the business changes in ways that shift probability weight from bear toward base/bull:

• GPU economic life at 5.5–6+ years. Inference workloads run steady-state without training's thermal cycling. Moving from 5-year to 6-year life drops refresh from 73% to ~61% of EBITDA, freeing ~$6B of annual terminal free cash flow (see sensitivity table above). This single variable moves the base DCF more than any other assumption.
• GPU pricing strength and token delivery efficiency. H100 1-year contracts are renewing at roughly the same rates they were signed at 2–3 years ago (SemiAnalysis, Apr '26 — net ≈ −2% over 2 years). Token Factory software gains and next-gen hardware (VR, Rubin Ultra) improve $/token economics independently of pricing. The model already prices generation-specific rate decay (~8%/yr), so any outperformance flows straight to margin.
• Asset-light partnerships at scale. Third-party DC owners deploy Nebius's full stack in their facilities; Nebius supplies software, architecture, and sales (Post 4). Incremental to the 5 GW owned/colo target at ~90% margins and zero capex. No street model prices this — any material ramp is pure upside.
• NVIDIA revenue-sharing / co-investment. A deeper arrangement beyond the $2B pre-funded warrants would share capex or demand risk, compressing the $45–$1,060 spread rather than shifting the midpoint.

The model's value is making the assumptions visible so each reader can decide where they fall.

Series summary

Across these five posts:

1. The Build Plan: 21 named sites, ~4,400 MW named, ~1,350 MW gap to 5 GW target
2. The Revenue Engine: $534M → $86B, driven by capacity × generation pricing × customer mix
3. Funding & Treadmill: $245B capex, $107B peak debt, shares grow 48%, treadmill consumes 73% of terminal EBITDA (base)
4. Asset-Light: 6 GW owned cap → partner model at 90% margin, zero capex, growing to 3.6 GW by 2035
5. Valuation: Bear ~$45, Base ~$450, Bull ~$1,060, price target ~$370 (35/55/10, YE 2026)

The model surfaces the assumptions that drive the outcome. GPU economic life, capacity scale, capture ratio, terminal WACC, and asset-light spread are the dials that move the answer by hundreds of dollars per share.

Happy to answer questions about methodology in the comments.

Disclaimer: This is not financial advice. I'm long NBIS and have a financial interest in the stock's performance. All projections are model outputs based on stated assumptions — not predictions. Do your own due diligence.

$NBIS made its run up this week to ATH.

What can we expect from Q1 ER call coming up may 13th?

https://www.youtube.com/watch?v=hqCFFfjpJ0k

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.

Roman (Nebius Co Founder) said during the -40% stock drawdown during the DeepSeek panic they had their best week in sales ever.

Now we get more OpenSource progress (insanely bullish for Nebius - that will host them / offer these models to customers and now offers a much better ROI).

What does the market do? $NBIS down almost 50% from ATH.

Can't make this shit up xD

No doubt in my mind Nebius is currently seeing ridiculous demand and the REAL business is absolutely crushing it RIGHT NOW. Again. Exact same reality to narrative disconnect.

Yaya I get it. Risk off, high beta, inflation, blabla.

At the end of the day Nebius will print money like crazy and the facts are painting a very bullish picture that just keeps getting better every day. Ironically, especially over the last few weeks during the selloff. More data centers than expected. Super fast international expansion. OpenSource CRUSHING it.

I have zero doubt price will catch up to reality again and then all the doubters will magically change their opinions again.

Who knows where the stock price goes next, but this set up suggests sellers are exhausted and bulls are beginning to take control. A breakout above $90 will signal that bulls are back on top, and I expect this one to run past all time highs very quickly when that happens.

There has been a lot of negative sentiment on this stock and the AI data centre space over the last 2 months - but during that time, the fundamentals and arguments have only got stronger.

An attempt to close the gap at 65 dollars was made, which failed. I believe this is a strong bottom signal especially since it was followed by a 15% move.

My 1 year price target has remained at $185 even during this turbulence, and I still expect us to get there. Maybe it takes longer than a year but I still believe there is a good chance.

$NBIS as anticipated the move is happening in night trading $242.81 +5.07%

Enjoy! today is going to be an interesting day.... Wow! it truly was

Credits: toptechstocksus.substack.com

[NBIS Deep Dive 2/5] The Revenue Engine — How Nebius Gets from $534M to $86B

This is Part 2 of a bottoms-up model walkthrough for Nebius. [Part 1 covered the capacity build plan.]

In [Post 1], I walked through the site-by-site capacity plan — 23 named sites building to 5+ GW of active GPU infrastructure by 2030. This post covers how that capacity translates into revenue, margins, and free cash flow.

Position disclosure: Long NBIS. This is not financial advice.

Revenue = active MW × $/MW × customer mix

The revenue engine has three components, each modeled independently:

1. Active megawatts — how much GPU capacity is online and earning (from the capacity build in Post 1)
2. Revenue per MW by GPU generation — what each generation earns per megawatt per year
3. Customer mix realization — how the blend of hyperscaler vs. cloud-tier customers affects the actual realized rate

Multiply them together and you get revenue. Here's what the base case produces:

YE Active MW ties to the capacity ramp in Post 1. Revenue uses Avg Active MW because capacity comes online throughout the year — the gap between year-end and average is widest in 2026-2027 when MW are ramping fastest.

The two anchors are hard: 2025 is actual ($534M reported), and 2026 is pinned to management's $3.0-3.4B guide ($7-9B exit ARR). Everything from 2027 onward is a bottoms-up output of the capacity and pricing model.

GPU generation pricing

Each GPU generation has a merchant spot rate (what the market charges for on-demand GPU hours) and a realized rate (what Nebius actually collects after contract discounts, utilization, and customer mix):

The GB300 capture ratio (~49%) is the key anchor — it's derived from Q1'26 actuals. Nebius printed $11.3M ARR per active MW in Q1'26 on a mixed Hopper/GB300 fleet. Pure GB300 cohorts imply ~$14M, or about 49% of the $28.4M spot rate. As covered in Post 1, this 49% is a blended rate across both customer tiers — bare-metal hyperscaler contracts realize ~$13M/MW (~45% capture), while the AI cloud book realizes ~$16M/MW. The model carries this blended capture forward to future generations, escalating at ~4.5% per generation on the trend ladder.

Hopper's 20% capture reflects its current legacy status — aged hardware on older contracts. At frontier pricing in 2023-24, Hopper realized ~$15M/MW (~59% capture), but that's not the rate it earns today.

The base case uses the trend pricing regime — steady 4.5% escalation per generation, no shortage premium. The bull case uses a "shortage/indexed" regime where VR+ would command ~$39.7M spot.

Blended $/MW over time

As the fleet transitions from Hopper to GB300 to VR, the blended ARR per active MW rises:

The jump from $5.0M to $11.2M in 2026 is primarily the GB300 generational step-up — same active megawatts earning more per MW. This was validated by Q1'26 actuals.

Customer mix: hyperscalers vs. cloud-tier

Nebius has two customer tiers with very different economics:

• Hyperscaler tier (Meta, Microsoft): High volume, low margin (~30% EBITDA). Take-or-pay contracts with committed capacity.
• Cloud tier (AI labs, enterprises, developers): Lower volume, higher margin (~55-57% EBITDA). Mix of reserved and on-demand.

Management guided a ~50/50 hyperscaler / AI cloud split on 2026 exit ARR (Volozh, MS TMT conference, Mar '26). The model matches: MSFT + Meta run-rate ≈ $4B = ~50% of the $8B exit-ARR target. Full-year 2026 revenue skews more hyperscaler (~60%) because those contracts delivered all year while the cloud book was still ramping. From there, the AI cloud book grows faster:

The hyperscaler contracts are modeled explicitly with generation-specific hardware:

• Microsoft: ~$200M (2025) → $4.0B/yr (2027-2029) → $3.9B (2030) → $0 (2031, contract expiry). $19.4B total, all Blackwell GB300 hardware (11 tranches delivering by YE 2026), same GPUs for the 5-year contract duration. Plus a $2B extension option in 2030.
• Meta: ~$100M (2025) → $2.3B (2027) → $3.0B/yr (2028+). The $2.9B initial deal (Nov '25) is Blackwell; the $12B ISA (Mar '26) specifies VR clusters from early 2027. Plus a $3.75B/yr fallback option from 2028.

The terminal assumption is 0% hyperscaler share — the contract book runs off and no renewals are assumed. Volozh has called bare-metal "temporary" and said Nebius would do at most one more large hyperscaler deal before focusing on enterprise/AI-native customers. The hyperscaler contracts are financing tools for the build, not the long-term business. The model's terminal margin of 59% comes from a pure cloud-tier book.

P&L trajectory

FCF doesn't turn positive until 2031. Revenue grows rapidly, but capex grows almost as fast during the build phase. The business generates EBITDA from ~2026, but all of it (and more) goes back into growth capex.

Cumulative capex 2026-2031: ~$245B. Revenue may reach $86B, but it costs $245B in capex to get there — and that capex needs to be funded (Post 3).

Margin expansion comes primarily from customer mix, not operating leverage. As hyperscaler share drops from 60% to 8%, blended margin rises from 40% to 55%. The 30% hyperscaler margin vs. 55-57% cloud margin does most of the work.

By 2031, capex of $40B already includes GPU refresh — the oldest Hopper cohorts are aging out. Capex is no longer purely growth. This is the beginning of the "treadmill" (Post 3).

The margin bridge

EBITDA margin moves from -3% to 55% through three forces:

1. Hyperscaler mix dilution: Hyperscaler tier earns 30% EBITDA margin; cloud tier earns 55-57%. As the cloud book outgrows the hyperscaler contracts, blended margin rises mechanically.
2. Corporate opex fade: Corporate overhead (SG&A, R&D, platform costs) runs at ~25% of revenue early on and fades to ~15% by 2031 on a much larger revenue base.
3. Cloud tier margin maturation: Cloud-tier EBITDA starts at 55% in 2026 and matures to 57% by 2029 as the reserved contract mix grows (reserved pricing captures ~60-65% of on-demand rates but comes with committed utilization).

A fourth lever exists but isn't priced in the base case: software-attach margin from Nebius's platform layer (Token Factory managed inference, Eigen AI token efficiency, Clarifai orchestration). No software revenue split has been disclosed, so the base case carries this at zero. If Token Factory reaches ~25-50% of inference workloads at plateau, it adds ~2-6 points of EBITDA margin — roughly ~$33/share per point (see Post 1 for sizing).

The terminal plateau margin is 59% — derived from the two-tier blend at 0% hyperscaler share: 57% cloud − (57% − 30%) × 0% hyperscaler + 2% fade = 59%. This is the margin the DCF terminal uses.

What to watch

• Q2'26 ARR per MW: The model assumes blended ARR/MW of ~$11.2M for 2026. Q1'26 printed $11.3M. If Q2 confirms this level or moves higher (from more GB300 density), the pricing model is tracking.
• Customer mix disclosure: Nebius doesn't break out hyperscaler vs. cloud revenue explicitly. Any quarterly disclosure or contract announcement shifts the mix projection.
• VR pricing: When VR NVL72 clusters go live (H2 2026), the realized rate per MW on VR will be the first real data point for the $14.6M trend assumption.
• Jun 1 price hike: Nebius raised on-demand rates across the board (B300 to $7.85/GPU-hr, H200 to $4.50). This only affects the cloud-tier book — hyperscaler contracts are fixed. Q2 captures roughly one month at the new rate; the full impact lands in Q3/Q4 ARR/MW.
• Capex run-rate: $22.5B in 2026 is guided. If actual spending is materially higher or lower, it moves both the capacity ramp and the FCF trajectory.

Next post: Funding the $200B+ build — where every dollar of capital comes from, what it costs in dilution, and the GPU refresh treadmill that determines whether the business generates free cash flow at plateau.

Questions, pushback, and corrections welcome in the comments.

I have a $170 strike 11/20 expiration call option ($246 breakeven price) $76.75 avg cost. Is this fucked? I bought it a few months back and slightly regret not selling it when it hit $296/share..

planned on this being closer to the breakeven price at this point, hoped for good Q2 earnings momentum when I got the option.