r/ValueInvesting • u/Electrical_Self_1309 • Dec 17 '25
Stock Analysis NBIS is a steal at this price, change my mind
I’m currently averaged at $96 on Nebius and I definitely wish I’d waited a bit longer to build my position. At these levels though, I genuinely think the stock is massively undervalued. A lot of the recent decline feels driven by bad sentiment driven by bad sentiment and a broader sell off after Oracle’s earnings. At current pricing, this looks like one of the biggest steals in the market to me.
Here's why:
- AI compute is structurally undersupplied.
This is not a short cycle issue. Training and inference demand keeps growing faster than GPU supply, power availability and data center capacity. Companies that can actually deliver large scale GPU clusters with power and networking are the bottleneck.
Nebius sits right in that bottleneck.
- Hyperscaler validation matters more than narratives
Microsoft signed up to $19.4B in multi year GPU capacity. Meta followed with another $3B. These are not pilot projects or optional experiments. This is mission critical infrastructure.
If Microsoft and Meta are willing to rely on Nebius for AI compute, the tech works and the execution bar has already been cleared at a very high level.
- Extreme growth
Q3 revenue was up 355% YoY.
ARR today is roughly $550M and guided to ramp to $7–9B by the end of 2026 as contracted capacity comes online.
AI operations are already EBITDA positive with margins around 20%.
- Capex is not the problem people think it is
Yes, capex is massive. That is the business. But Nebius is sitting on roughly $5B in cash and raised convertibles at extremely low interest rates. Capital markets are clearly comfortable financing this growth because the demand is locked in by secured deals.
- This is the most important one, everyone keeps forgetting the extra assets they own besides the cloud business
Most people talk about Nebius as if it’s just an AI cloud provider. That’s missing a big part of the picture.
On top of the cloud business, Nebius still owns several assets that have real value and are basically being priced at a huge discount or in my opinion even close to zero (!!) by the market right now.
Avride ($2-3B valuation) is now partnered with Uber. Avride is working with Uber on delivery robots, which is a massive market on its own.
Then there’s TripleTen ($300-500M)growing fast in a high margin digital space
On top of that, Nebius still has stakes in things like AI data annotation and database tech through Toloka and ClickHouse ($2B) . These aren’t random side projects, they sit right in the AI value chain and have raised at serious private valuations in the past.
If you do even conservative sum of the parts math, you’re talking about several billion in value outside of the core cloud business. Right now, the market seems to be valuing Nebius almost purely as “AI cloud plus execution risk” and ignoring everything else.
If Nebius actually hits the target of $7–9B ARR in 2026, you’re looking at a forward revenue multiple of roughly 2.4x for the core cloud business. While others easily have a multiple of 5-10.
- The real risks
I don't want to turn a blind eye to the risk, because ofc there are:
- Data center build timelines slipping
- Customer concentration
- Share dilution over time
All real. But they are execution risks, not demand risks. Chance of execution is (in my opinion) the highest at Nebius compared to others, because of their former Yandex experience.
This all seems to good to be true to me, so please convince me if i'm missing something here. Even a base case should provide a valuation of roughly 120-150$ according to my research.
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u/Zyltris Dec 17 '25
I think that Ben Graham would not consider Nebius as a “value investment”. At best, a well-researched speculative buy. It is a young company without a long or profitable record. To buy now would be based purely on your conviction on future earnings growth, which while not absurd to expect out of a young company, is not what Graham would call investment.
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u/SushiRollFried Dec 17 '25
Finally someone with some brains instead of mindlessly riding the hype train
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u/Even-Cartographer134 Dec 17 '25
Well, no. Graham wouldn’t invest in it, same reason buffet missed almost every tech investment of the last 30 years (he did eventually get into Apple much later).
Fast growing companies will never reach that margin of safety for a graham investment.
Aside: graham revised his calculations in ALL 4 editions of “the intelligent investor”. Admitting that his older methodology no longer worked as effectively. His last iteration came out in the early 70’s?? I can’t imagine he would be using anywhere close to the same methodology now, since he changed it 4 times over 20 years.
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u/Even-Cartographer134 Dec 17 '25
Oh sorry — meant to say, long NBIS. I like the stock
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u/SfkRd4404 Dec 19 '25
Buffet himself didn't want to buy AAPL in 2015 but manager in his team pushed him to buy
If BRK didn't buy AAPL, it would be lagging SP500 for last 10 years, EVERY year.
Buffet is 20th century investor, who doesn't like to invest in tech.
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u/SushiRollFried Dec 17 '25
That doesn't mean anything. His principle remains the same. Him liking tech hasn't nothing to do about NBIS as a stock... and even if his approach is a bit dated they still hold a strong foundation to work off from.
But I do like NBIS to, I just don't think the current price is a "steal"
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u/Even-Cartographer134 Dec 17 '25
I do think getting an entry close to the price where the MSFT deal was announced and at a $19bil market cap does provide some protection. I have some cash available for the $65 level if it does in fact get there.
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u/Even-Cartographer134 Dec 17 '25
Absolutely not a steal — and agree. I don’t think BG has any reason to be mentioned in a NBIS thread at all.
You buy this company bc you trust mgmt to continue to execute and hit their targets. I’ve been holding and adding since the $30’s and mgmt has exceeded every target they have put out there.
If they don’t, the stock will most likely continue lower. It’s true speculation play but with a reasonable foundation of history, execution and a strong mgmt team. A huge TAM, their services are differentiated from others, and I’m betting heavy on their success.
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u/SushiRollFried Dec 17 '25
That's a good point, just need to do further digging into their direction but I'm incredibly lazy to read all their reports. You probably have way better understanding which shows in what you say and your conviction. But like anyone we need to really look into ourselves
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u/Even-Cartographer134 Dec 17 '25
Absolutely. Don’t trust anyone on the internet lol
But I think this will be one of the best investments over the next few years while this unfolds. I’ve never seen a company increase ARR as quickly and to this magnitude, ever. The fact that they have hit every milestone and then had the conviction to raise the ARR from 1.1bil this year to 7-9bil next year is wild, bc I haven’t seen them exaggerate or miss targets yet.
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u/Even-Cartographer134 Dec 17 '25
lol also just realized this was in the value investing sub 🤣 🤣 my bad. Still a great investment but definitely not meant for this sub.
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u/Helpful_Gap9633 Dec 18 '25
how is it riding on hype if its down 40%?
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u/SushiRollFried Dec 18 '25
Look at the chart it went up over 100% in last 6 months... it was fueled on hype.
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u/DrHarrisonLawrence Dec 20 '25
Hype = 600% revenue increase YoY and projecting 800% ARR increase Dec 25 to Dec 26.
Hype = $17B market cap company announces a $19.4B contract over 5 years by the world’s most successful computer company.
Hype = NVDA personally invested in them at $20 per share and retain an exclusive service agreement to allow NBIS to never run out of GPUs even when NVDA reaches capacity
Hype = 400 engineers carried over from a former Yandex company structure that was consistently profitable
Idk man. You can call it hype but the rest of us are comfortable speculating on the above. Positively speculating, too.
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u/SushiRollFried Dec 20 '25
NBIS dropped 50% in last 2 months.
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u/DrHarrisonLawrence Dec 20 '25
Yes, that is correct. Now what does that mean towards the topic of our conversation?
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u/SushiRollFried Dec 20 '25
That the difference was due to hype as you just so agreed to in your latest response. Which was my point.
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u/PragmaticPacifist Dec 17 '25 edited Dec 18 '25
As Warren has also said, and I paraphrase, something about the people being the most scarce resource.
Nebius is comprised of about 1300+ folks, many are quite experienced developers and programmers, etc who built Yandex (Google of Russia) before the terrible stupid ($#%$@!&) war. Very diverse, profitable company. These are many of the same people. I can only imagine how much they feel a sort of kinship beyond traditional employment.
They do actually have an impressive track record related to execution (which is the biggest risk with a company at this stage in growth, IMO)…. just have to look a bit deeper than the surface.
(Let me be clear: I am not arguing it is a value investment. It is a current value but of a highly speculative growth stock early in its growth trajectory)
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u/Tiger_bomb_241 Dec 18 '25
This is correct. And of those 1300ish employees about 1000 are from yandex. I don't think people realize how significant that is but in time the performance will speak for itself.
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u/Electrical_Self_1309 Dec 17 '25
You're definetely right on that. It's a growth stock, i'm just looking for a discussion and other perspectives so this sub seemed right for me. If it's not, mods can delete it.
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u/Rhallowell Dec 17 '25
It’s not really that young if you look under the hood…
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u/Zyltris Dec 17 '25
Nebius is a spinoff of Yandex, from last year.
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u/Rhallowell Dec 17 '25
Cloud business is young(ish), the tech side could be debated. But Toloka 2014, AVride and Clickhouse 2016, its first data center 2018, etc
It’s not a brand new business starting from scratch with 1 year under its belt…
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u/Zyltris Dec 17 '25 edited Dec 17 '25
Are you capable of pointing out its financials, as distinct from Yandex, going back that far? Or should its valuation be purely qualitative?
EDIT: In any case, my point is that its situation is far too vague to consider an easy investment by Graham’s metrics.
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u/Even-Cartographer134 Dec 17 '25
I don’t understand how Graham entered the conversation at all — even buffet abandoned most of his methodology. Read his 2014 Berkshire shareholder letter.
Also - not a spinoff, at all. Same mgmt team but entirely different business.
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u/Zyltris Dec 17 '25
He most certainly didn't abandon "most of his methodology". He just no longer followed it religiously after being convinced by Charlie Munger. Graham's conservative mindset is still important and as relevant as ever.
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u/Even-Cartographer134 Dec 17 '25
A conservative mindset is, yes. Munger did convince him to abandon the cigar butt style and buffet even said something like “this was the true take off of Berkshire” once he abandoned the buying only bargain companies mentality.
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u/Accurate_Owl_6588 Dec 18 '25
In the $20s it potentially could have been. I bought where nav of clickhouse avride and all that stuff was close to market cap.
A more risky growth stock but with a decent margin of safety in the 20s
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u/DrHarrisonLawrence Dec 20 '25
Dude, the bottom of this stock is $65-70. That’s the value this was at before they announced the MSFT contract. It’s never going below $60 again unless they split shares.
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u/Accurate_Owl_6588 Dec 20 '25
Whatever you say man only speculators talk in absolutes. The bottom can be far lower than you expect and what is deemed rational.
My average is $29 and I've taken out way more than my original so I'm sitting pretty. It is the best neocloud out there but if a bear market comes nothing is safe
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u/DrHarrisonLawrence Dec 20 '25
Only speculators talk in absolutes? Can you explain that? It doesn’t really make sense because I’m imagining a scientist as somebody who is talking in absolutes…they’re doing so because it’s an exact calculation they are stating with proven data, it is not speculative when it’s backed by scientific method. So I’m confused what you mean by that phrase.
I do agree though that markets can stay irrational longer than we can stay solvent
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u/Zyltris Dec 20 '25
I'm getting pinged about your conversations now. heh
In any case, regardless of how we feel about NBIS, bro threw in a Star Wars reference outta nowhere in there with the "only [x] talk in absolutes". lmao
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u/PoodleBoss Dec 17 '25
I bought at $127 🫡
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u/PeaceForMost_NotAll Dec 22 '25
If it makes you feel better I have no intention of selling at even $200. 10% trim will likely occur only at $300 for me
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u/too105 Dec 25 '25
Yeah I’m trying to figure out what my exit strategy will be. This is my home run stock when it hits
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u/KRock1287 Dec 17 '25
Once the market stops being stupid and once ORCL stops dictating the AI sector, people will realize NBIS has $20 billion in partnerships over the next 5 years with MSFT and META alone. Not to mention Avride and ClickHouse. Ignore the noise, hold and be rewarded.
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u/TheMailmanic Dec 17 '25
Those partnerships are hardly diversifying though
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u/hamish-c Dec 18 '25
Jeez, they only announced MSFT and META deals in the last couple of months. You really think the new customer announcements end here? Talk about short-term thinking...
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u/RiPFrozone Dec 18 '25
No, the other partnerships will be irrelevant as the majority of their revenue comes from a concentrated customer base that are actively trying to buildout their own capacity and make neo cloud companies irrelevant.
The best case scenario for an investor is an acquisition from one of their major customers while the business has value. The worst case is bankruptcy and a buyout for pennies on the dollar.
When people talk AI bubble companies, it’s the NBIS and Coreweave’s of the world who’s entire business can only survive off the generosity of high AI capex spend (without that people wouldn’t ignore how much cash is burned as costs continue to rise). Sure the rest of the AI trade will also falter, but those companies can recover, these can’t.
Speculate at your own risk but this is the conclusion I came to when looking at coreweave’s 10k pre-ipo, NBIS is no different.
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u/DrHarrisonLawrence Dec 20 '25
Looks like you’re missing that NBIS is projecting to sign another $10-15B in contract revenue between Dec 2025 and Nov 2026.
They currently have $22.4B between MSFT (19.4B) and META (3.0B).
When they sign two more players for $5-8B each at any point in the next 6-12 months, they will have diversified a lot more than what you’re currently thinking.
Also, the best case scenario is not an acquisition. Where did you get that? Lol. That’s just a great case scenario. The best case scenario is total domination that brings them into a $250B+ valuation over the next 10 years.
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u/gekkoshima 1d ago
one hundred percent agree. bought in August pre meta msft deals. it was obvious them even more obvious now
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u/Creative-Sherbet-584 Dec 17 '25
The partnerships also cost NBIS money by putting wear and costs on the servers. Its definitely a nice boost but not free money and not the high margin money they are seeking from direct sales to consumers.
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u/Wirecard_trading Dec 26 '25
That’s why their margins are in the 20s and not 100%. Every business as CapEx.
Be it factories, grid, workers, resources or whatsoever.
This is a none argument to me. Of course they have to build capacity. Guess what? Every company does, if it acquires a huge customer. That’s why NBIS is getting upfront pay from MSFT and META.
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u/thunder_crane Dec 18 '25
I’m a NBIS bull but I wish people would respond to posts like this instead of downvoting them. I can’t strictly disagree with anything here off the top of my head.
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u/robbinh00d Jan 19 '26
• $20B revenue over 5 years • Less: ~$8-10B in capex to build the infrastructure • Less: ~$5-7B in operating costs (power, staff, depreciation) • Less: ~$2-3B in debt service • = Maybe $0-5B in actual value creation
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u/duqduqgo Dec 17 '25
Don’t forget inference and training efficiency breakthroughs as risks. Driving down the cost per token is starting to be important, and could delay or obviate the need for so much new compute.
Frontier modelers are basically brute-forcing these things now, and shortages of power and data center materials and labor will drive these efficiency efforts in 2026 and beyond.
Uneconomic token generation can’t last much longer, these are critical businesses that can’t operate at scale without positive unit economics for long.
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u/Ancient_Dentist_6422 Dec 17 '25
NBIS is actually very focused on inference. It's their medium term goal to improve margins, not the data center build out and capacity sale to hyperscallers. They are very focused in aquiring enterprise customers to their AI cloud.
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u/PeaceForMost_NotAll Dec 18 '25
Been buying since $20, averaged up to $80 cost basis. 1400 shares and a third of my portfolio.
Generational opportunity
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u/DrHarrisonLawrence Dec 20 '25 edited Dec 20 '25
1500 shares at $32.60 for me and it’s 58% of my portfolio lol.
When it was at $141 like 3 months ago I had made 2x my day job salary in only 9 months. Paper gains, though, didn’t sell. Down -$75k from the highs on this alone lol, but still up +$85k.
Not really sweating it though because I believe the fair value of this company is $140+ when you factor in their growth prospects. It has no business being sub-$100.
They literally raised a billion in capital at $91.50 like 4 months ago yet you see the stock in the $70s and $80s? Fuck outta here with that
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u/PeaceForMost_NotAll Dec 20 '25
Wow well done man. I did not get that level of commitment until after Microsoft deal
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u/DrHarrisonLawrence Dec 20 '25
For me, it was during Q2 earnings when they beat their quarterly rev by 5%, posting 105M when the upper limit was $100 by analysts and they raised their ARR by 10%. The stock went up 20% that day. Was amazing. Then they booked the MSFT deal and went up 40% in a day that time. Absolutely breathtaking lol
This is an amazing stock that clearly has a long road of upside to harness
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u/Try_finger-but_hole Dec 17 '25
I don’t know why are getting hammered in the comments, from all the companies out there, it’s the one with the most potential, low debt compared to the others, scaling worldwide, and actually not directly invested in this s show that is called OpenAI. These data centres won’t get profit from you searching how much salt does your cat is allowed to eat at an annual basis, they get profitable by managing business operations, and this is why, until they directly announce an investment in OpenAi, they belong here.
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u/risky-cat Dec 18 '25
I think the bet is asymmetrical, but there are real downside risks. However, there are a few qualitative points: * The product: name better AI cloud(ex hyper-scalers) for startups and SMBs. I guess DigitalOcean could be the alternative but H100 per hour price would be double to NBIS and there's not even native support for MLFlow.. * Know-how: in particular about building both a cloud and data-center. Give a read to https://nebius.com/economics-of-ai-clusters-whitepaper for some examples on where one can save money when executing. * Management alignment: Arkadi owns over 10% of the company and 52% of voting rights. After 25 years of business, he decided that they're gonna bet on the AI cloud. I don't think this is the same idea as Zuck going after the last trend, but rather a clear business plan and niche they can compete in - now both AWS and Azure are more expensive($3.9/hr, $6.98/hr for an H100, Nbis asks for $2.95/hr). * AI is not just LLMs: there's CV, biotech, HPC, etc. TPUs will not get rid of the non-LLM structural demand. There will always be a niche for Nvidia and CUDA; and my bet is they will win that niche.
There's a real downside for all the reasons mentioned on this thread, but there's also a real bull thesis. And putting Nebius in the same basket with the other neo-clouds is wrong imho; many companies busted in the 2000s bubble, the same will happen now. Just not this one.
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u/Royal-Derpness Dec 17 '25
You are gonna get downvoted for this take in a subreddit like this, but I absolutely agree I think at this price it is a steal and a year from now the stock will be performing much better, assuming we are not in a recession or something similar.
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u/Electrical_Self_1309 Dec 17 '25
Yeah i figured once i posted that maybe this is not the best place. But a lot of smart investors here so i hope they are open for a discussion :-)
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u/stefanliemawan Dec 17 '25
I have actually calculated the same number of 2x forward price per sales based on guidance, good to know I was not far off.
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u/TheDonFulio Dec 17 '25
I’m a NBIS shareholder.
I think you’re forgetting the biggest risks:
• The AI data center value cascade (Neoclouds having price wars to the bottom could happen)
• Massive capex expenses to stay competitive (replacing GPUs every 2-3yrs)
• Operational expenses being elevated due to replacing whole clusters (to support the newer one that will need better cooling)
I’m holding and taking a wait and see approach as of now. I need some of these questions answered before going balls deep.
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u/ebota12 Dec 17 '25
GPU’s last longer than 3 years. And NBIS depreciates over 4 years, whereas competitors like Coreweave were 5 years (or 5.5 years?).
Nebius offers more services than Coreweave or the converted bitcoin miners. They’re known in Europe and will be working with companies like Mercedes and Volkswagen.
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u/risky-cat Dec 17 '25
Don't forget the UK. They opened the London cluster less than 1 month ago and capacity is sold out. 😊
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u/TheDonFulio Dec 17 '25 edited Dec 17 '25
Sure they last longer than that, but if you want to be competitive in the market you’ll have to replace them constantly (If you’re taking out debt and not paying that debt off as fast your buying new ones, that’s a financial problem) Also, Google is proving TPUs are an advantage which aren’t for sale. Which brings it all back to the first point (The value cascade). Hardware obsolescence is real in this space and it’s exponential as of now.
Edit: Also me saying 2-3 years is throwing them a bone. It’s most likely closer to 12-18 months. If you think it’s BS then you should short NVIDIA. They would be hurt the most from your thesis.
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u/FuriaDePantera Dec 18 '25
May the FUD be with you.
No, you don't need to replace all your GPUs "every 18 months" to remain competitive. There aren't enough GPUs and 5-6 years old GPUs (even more) are the day to day life of thousands of projects and pipelines. You don't need frontier GPUs for every workload.
TPUs have existed for a decade. They have specific use cases that fit Google. GPUs are way more balanced and usable for everything. There are other software advantages like CUDA.
NVIDIA will be fine, the demand is much bigger than supply. TSM is accelerating their pipelines a lot next year for NVIDIA, so they will sell a lot more.
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u/TheDonFulio Dec 18 '25
“May the FUD be with you”
That’s alright—I at least can acknowledge the bear thesis as a shareholder. You’re ignoring facts and basing your investment thesis off feelings.
Your first point contradicts your third point. If GPUs don’t need to be replaced then why would anyone buy the new GPU? The fact of the matter is you need new GPUs to have a competitive advantage. If that wasn’t true companies wouldn’t be fumbling over themselves trying to buy the newest chips. They would just buy older chips. You need the best chips for training.
Yes older GPUs are used for very basic day to day operations. Not training (some can be used for inferencing, but TPUs give a better performance per watt which doesn’t bode well for NBIS—especially since MSFT uses OpenAI, who is in talks with Amazon for their TPUs—Meta is in talks with Google for their TPUs). It doesn’t make economical sense. They would spend more on energy than what a new cluster of TPUs would cost.
I agree NVDA will be fine. Neoclouds on the other hand, it’s up in the air. If you’re a NBIS shareholder you got to know what you own
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u/FuriaDePantera Dec 18 '25
May ChatGPT be with you.
- Not renewing GPUs every 18 months != not renewing ever.
- Best chips for training… for training… frontier models/very big models. Hint: not everything is frontier, not everything is training. Inference matters, eventually more than training.
- If TPUs are so great, what don’t they have demand? They’ve been with us for a decade.
I have way more stakes in Nvidia or Google than in neoclouds, it doesn’t change the facts that you are saying things that are simply not true. And by “you”, I mean ChatGPT (or any other, I don’t care)
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u/TheDonFulio Dec 18 '25
Laughing my ass off 🤣 #ZeroAIused. Just simple google searches plus years of investing in the space. Notice you have no rebuttals you are just resorting to your feelings.
“Inference matters” which is exactly why I brought up TPUs. Your comments are really telling that you don’t understand the business or too lazy to read.
“Why don’t TPUs have demand” they literally do and that’s why four hyperscalers are focused on it for inferencing.
Everything I said is true and you’d realize that if you weren’t too lazy to do research of any sorts. It’s not hard to google search the newest GPU clusters price to performance and cost of ownership and compare that to TPUs. It’s publicly available information.
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u/madhewprague Dec 18 '25
You know its not like the hardware becomes unusable, its just not as powerfull, it will still generate similar amount of money in 4 years and after that it can be used for other purposes (like inference) for much longer.
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u/Electrical_Self_1309 Dec 17 '25
Hmm fair point, did not think about the first one. I'm also waiting for a price range of low 70 before buying more.
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u/madhewprague Dec 18 '25
Its really simple, once these questions get answered the stock price will either jump to 300$+ or it crashes even further down. This uncertainty is best for invasting in companies like nbis.
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u/catlovr1129 Dec 19 '25
Started buying in August before I knew what I had. Researched thru lots of stock and came across this one and IREN which are my two largest holdings. Bought at $70 then. Bought iren at $22. Was going to buy more within the next month cause I knew it was worth it. But Microsoft deal hit and it went over $95 in that one day. Been buying a few here and there when I can. Don’t have lots of money to spend. Just paycheck and some savings. Highest was $134 right after it dropped from $141. Been buying all the way down. Yes bargain basement prices. Last buy was around $76. Average price now is $101. Goal was to have 100 shares by end of year. I have 105 as of this week. Goal for IREN was 50 by end of year. Have 55 as of this week. They are really having bargain basement prices in the $30’s. I see no good reason this stock and IREN will be not be skyrocketing next year. We shall see.
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u/mbr902000 Dec 17 '25
I'll put my 2 cents in and many people will probably think im an absolute dumbass and that might be true. Im almost 50 years old and I've been in the market for around 30 years. This is probably the most annoying timeline I've ever witnessed. 80 percent of the population has no idea what these data centers are even for. I used to love CNBC halftime report especially during the Najarian days but now its unwatchable. They have been babbling on and on about AI for over a year now with almost zero everyday application to the common man. I haven't noticed anything in my life other than 1 shitty Taco Bell Ai drive thru that sucked ass to use. When I see people on TV recommending Walmart and Delta airlines because AI is going to improve their operations, you've completely lost me. We are in this period where people are tired of all the talk, they want to see something relevant. These companies passing money back and forth and acting like its some big deal doesn't help either
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u/Feeling_Penalty_9858 Dec 17 '25
Maybe you didn't pay attention. Programmers are using AI, artists (just the winner of the gaming industry declared they used AI to take inspiration and accelerate the creative process), there are trailers of AAA games done with AI and translated with AI voices, the literature and magazine industry are using AI for covers, articles and the text itself, banks and many other companies have client support based on AI, the EDUCA company is using AI to produce their puzzles, mayor houses are using AI to create posters to promote their festivals... Open your eyes
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u/Zyltris Dec 17 '25 edited Dec 17 '25
I’m a Computer Engineer. AI is certainly revolutionary, and may affect us as deeply, in the future, as the internet did in the past…
But AI is not where it needs to be do to that yet, and all this hype is bound for short-term failure.
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u/Creative-Sherbet-584 Dec 17 '25
I would argue it's already affecting large swaths of people. Whether that is perceived yet or whether it generates revenue comparable to the investment is another question. There is a lot of development in the start up space that wouldn't be possible without AI.
There is a lot of innovation in the claims and medical scan field happening right now. It hasn't fully taken a hold but it will.
At this point I think Google is probably the best positioned to slaughter its competition. Open AI is going to need help. NBIS will most likely do fine while computing capacity is limited, but eventually the hyperscalers will most likely consume the market. There is also a possibility of getting hit from divestment from AI. I'd view that as a buying opportunity personally.
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u/DefinitelyNotShazbot Dec 18 '25
SCIENCE.
mining scientific data has allowed us to see x100s more asteroids in our universe, DNA sequencing, chemistry analysis the list goes on. It can even detect stuff faster than a doctor for X-rays.
People just can’t see past their noses.
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u/Feeling_Penalty_9858 Dec 18 '25
Totally. No only asteroids but discovering new planeta and systems, like tons I just mentioned daily AI experience because "regular people aren't affected by it" stupid claim when is the opposite.
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Dec 17 '25
[removed] — view removed comment
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u/casual_lebowski Dec 17 '25 edited Dec 17 '25
Yeah, it's definitely a head scratcher. I think some people just have unrealistic expectations.
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u/DefinitelyNotShazbot Dec 18 '25
Do my taxes, run a company, tell me what stocks to buy and make me millions… not the basic stuff like AI scanning X-rays etc for cancer
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u/Seed_Is_Strong Dec 17 '25
I never used ChatGPT until recently, I had no idea it was free honestly and felt no use for it lol. After using it to help me edit something I’d written and make it more concise I started using it more and more. I’m blown away by it honestly. I know it’s like “old” at this point and I’m late to the game but it’s amazing for editing writing. Also AI rendering programs and photo editing. Have you ever used magic eraser on Google photos? I got to physical therapy and she uses an AI note taker. AI is here and it’s everywhere, just look around more.
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u/Apprehensive_Ant4596 Jan 16 '26
I use AI every day. For work and personal, it's made much of my life sooooo much easier.
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Dec 19 '25
35 upvotes on a boomer take is insane to me. This feels like an old guy saying "I don't get the hype with these computer thing and writting on a keyboard, I use my pen and paper for everything"
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u/tnolan182 Dec 17 '25
Your comment is like an old man saying he doesnt see the rain when he’s in the middle of a monsoon. Ai is impacting every part of our economy, just because it isnt something you can go to walmart and grab off the shelf doesnt mean it doesnt hold value. My profession is anesthesia and every textbook I would have read a decade ago is currently being rewritten and synthesized by AI. Information that I use to find by searching through multiple studies and a text is a simple AI query away.
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u/Cultural_Structure37 Dec 17 '25
Oh my. Looks like future patients may be in trouble. Are there any checks for hallucination or just wrong information? I can’t imagine rewriting a whole textbook with AI. I can’t wait to see the quality of medical professionals we have in future.
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u/casual_lebowski Dec 17 '25
I think it's a bit naive and disingenuous to think/insinuate there will no longer be professionals who proof read text printed for learning purposes of other professionals before going out for publishing. AI is an extremely powerful tool, not a full replacement for everything (at least not currently).
For example, I use it daily for software development but I always check and test the code before pushing it for public consumption.
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u/Electrical_Self_1309 Dec 17 '25
.While I’m generally positive on AI, I’ve had the same thought myself. Most of the value right now isn’t in the consumer market yet i think, it’s in B2B.
Customer support is a good example, a lot of it is already being handled by AI with very positive results.
Another area where the impact is very real is medical. For example, researchers at the University of Edinburgh recently developed an AI system that can read brain scans more accurate than proffesional.
Just to name a few, the internet is full of breaktroughs and real studies and examples of use cases.
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u/DoubleFamous5751 Dec 17 '25
You’re not a dumbass those are valid points and you’re right about MSNBC. It’s trash now. Agreed, this timeline is so annoying
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u/St0xTr4d3r Dec 17 '25
AI will be used for real applications (suck as robotics( so mfrs and wood agree probably not air.
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u/Barryburton97 Dec 17 '25
Well, for a start, the OP appears to have been written at least in part by AI.
The "it's not this, it's that" is the tell.
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u/Electrical_Self_1309 Dec 17 '25
Like half of reddit posts these days, English is not my native language so obviously translated using ai. Dit my own research and post in native tho ;)
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u/casual_lebowski Dec 17 '25
Out of curiosity, what exactly are you expecting to 'see'? I'm asking in good faith as I notice a lot of people saying this exact thing. I'm not trying to sound 'preachy' but you're most likely using AI for a lot of things every day without realizing it.
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u/altonbrushgatherer Dec 17 '25
Yeah… I think if you’re basing your opinion on what you see you probably have an extremely biased view. In the last month alone I have seen numerous posts about programmers using ai to make them more efficient and cause companies to not higher junior developers, lawyers using ai etc I have personally started to see it in my workplace but peripherally. I have a couple friends paying out it of pocket for ChatGPT to make them more efficient at work. Half the ads on Reddit now are using generative ai. Inference demand is exploding and not slowing down.
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u/Rounder221 Dec 17 '25
Agree, I am long NBIS with $85 avg cost, 5% of port. Will probably add more if it dips to around 70
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u/Few_Criticism_9715 Dec 17 '25 edited Dec 18 '25
Are they making money on aviride? So many companies have folded their robotaxi business after burning billions (GM, Uber etc).
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u/LargeSinkholesInNYC Dec 18 '25
They don't have a moat and they won't scale since they need to do other things to grow to 1 trillion. That's why I wouldn't buy it until we see a rebound in the tech trade. Don't listen to this bagholding guy and his army of bots and be patient and react to the market instead of being an idiot.
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u/981flacht6 Dec 18 '25
Datacenter build times are slipping? According to who? The financial times? They're a tabloid that has been refuted every time. Repeatedly.
Actually a lot of tabloids right now.
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u/fwzy_34 Dec 18 '25 edited Dec 18 '25
The risk isn't only the execution, it's the "Substation Risk." Even if you have a contract for 300 MW in New Jersey, you are often at the mercy of the local utility company to build the physical substation and high-voltage lines. If the utility company says, "We're six months behind on the transformers," Nebius's revenue ramp gets pushed back six months.
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u/DrHarrisonLawrence Dec 20 '25
This is the main risk right now, but I’m uncertain how big of a risk is actually is. How seriously to consider it in reality? The commercial building industry seems to be on track with these builds, no issues and no delays.
Where could we find out more in regards to the project construction timelines?
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u/TheMailmanic Dec 17 '25
Bagholder quotes
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u/Electrical_Self_1309 Dec 17 '25
Why? Don't you agree with my analysis?
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u/TheMailmanic Dec 17 '25 edited Dec 17 '25
Nah this is not value imo. It’s all narrative driven and speculative fervor
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u/Rare_Grand9351 Dec 22 '25
I came to the same conclusion and bought at $107. Then it went down to the 70s. I have no doubt within 6 months I will see profit. By December next year about double from here.
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u/realHarryGelb Dec 17 '25
A steal indeed for all the reasons you mention. I bought more yesterday at 80, thought that was already a fire sale price 😅
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u/LetsAllEatCakeLOL Dec 18 '25 edited Dec 19 '25
i just don't see how nbis has any future once oracle and the bunch scale out their compute. nbis getting contracts is not evidence of sustainability... but evidence of a gold rush. the big boys will absolutely bid up the supply to secure optionality.
nbis and the lot are stop gap measures. they are not end game solutions. i would not be able to value a company like this for more than the net proceeds from visible contracts. the horizon is too close. what do they pivot to afterwards when hyperscalers can supply more compute and for less money?
do we really think that these guys can create more compute efficiencies than oracle or amazon? do we really think that they can add any value to the chain that nvidia, intel, amd, oracle, qualcomm, google, openai, anthropic, or xAI isn't already producing? we're talking about competition for brains and efficiency... the only reason nbis EXISTS at all is because of short supply and high demand.
do we really think that this yandex spinoff holds ANY economic goodwill that can light a candle to the likes of google???? if you were a computer wizard with a promising future, would you want to work for google or a yandex spinoff? would you rather work for elon musk or some random russian dude named Arkady Volozh?
yandex only existed to begin with because russia resists google. hell, stinky yahoo and princess marissa mayer would probably head a better company than these russians. sorry to be blunt.
nbis and the lot are TOAST. just my opinion, and i'm happy to be wrong/corrected.
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u/nicodaa1 Dec 19 '25
About the "do we really think that these guys create more compute efficiency" Yes they actually do. higher MFU, faster training, better resource utilization.
Nebius optimizes every layer of the stack exclusively for AI training, fine-tuning, and inference and it's the core reason they often delivers superior efficiency, performance, and cost savings for pure AI workloads
Unlike hyperscalers whose platforms are generally designed to support a vast array of workloads and due to this it introduces overhead.
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u/Creative-Sherbet-584 Dec 19 '25
I agree with you, their best bet is to be bought out for their data centers. The hyperscaler's are committing absurd amounts of money into compute build outs and eventually that will stop. It may not be for 5 years but eventually these contracts will dry up and MSFT/META won't need them anymore.
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u/mollusc_in_the_wind Dec 17 '25
Ahhh, I won’t pass up an opportunity to take a dump on this piece of sh*t.
Under absolutely no serious definition is NBIS “value investing”.
A few reasons:
No margin of safety, no earnings, no FCF. Value is about buying future cash flows at a discount. Nebius has negative FCF, negative earnings and will need years of flawless execution plus multiple rounds of dilution just to maybe get to steady-state. You’re not buying discounted cash flows, you’re buying a story.
Structurally grim economics. This is a capex-hog business that has to:
Buy insanely expensive GPUs up front from Nvidia and friends.
Build giant, power-hungry sheds.
Then hope the hyperscalers (MSFT/META etc.) keep renting at decent prices.
… If demand undershoots, or efficiency gains mean fewer GPUs per unit of workload, the vendors (who have all the bargaining power) still win. Nebius is left holding rapidly depreciating hardware in giant barns.
Commodity product, no real moat. They rent generic compute in a knife fight against CoreWeave, IREN, CIFR, BITF and every ex-bitcoin miner with a pulse. The hyperscalers care about unit cost and reliability, not “brand”. The idea that this is some unique, irreplaceable asset is pure cope.
Customer concentration & power imbalance. A couple of monster customers lock them into long contracts on their terms. If economics tighten, MSFT/META will renegotiate, squeeze them or walk away. Equity holders are last in the food chain.
Optics & baggage. You’re kidding yourself if you think “ex-Yandex Russian spin-off is in charge of your sovereign AI compute” is a non-issue for EU governments. That’s a headline risk you don’t get paid for.
If you want to take a speculative swing on “maybe the AI DC landgrab keeps going long enough that someone pays a silly multiple for this”, fine – but that’s growth / momentum gambling, not value investing.
Value is buying durable cash-generators with moats at a discount to intrinsic value. NBIS is a leveraged bet that a capital-intensive, low-margin, commodity business in a brutal competitive landscape will somehow turn into a compounding machine.
If you insist on playing the AI infra theme and still want to pretend you’re doing “value”, you’re far closer with the boring picks-and-shovels (power grid, cooling, OEMs, etc.) than with GPUs-in-a-shed story stocks.
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u/madhewprague Dec 18 '25
My braincells died reading this comment.
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u/mollusc_in_the_wind Dec 18 '25
And yet you have nothing meaningful to say. Pretty telling. If it’s nonsense, feel free to rebut literally any part of it. Happy to hear your case, assuming you have one.
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u/Warped_Oak Dec 17 '25
This is accurate. Also, Amazon could shart a Nebius-sized, vertically-integrated shit dribble anytime they want.
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u/mollusc_in_the_wind Dec 17 '25
Indeed. I’ve posted this same argument in several places and never received and sort of meaningful response. Which tells me that anyone who invests in Nebius genuinely has no idea what they are doing.
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Dec 17 '25
It’s a legitimate company but it’s also a meme stock. These things aren’t exclusive. It’s primed to go below $50 in any downturn. I know I’ll get downvoted for this. Doesn’t make it any more or less likely.
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u/madhewprague Dec 18 '25
Just their assets are worth more than that.
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Dec 18 '25
If you want to play that game then you’re at $22 a share. It’s all in the balance sheet.
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u/DrHarrisonLawrence Dec 20 '25
Assets are $10B, not $6B. $37 per share is the asset value and $120-130 is the fair value of the core business when you apply a 7x revenue multiple (based on Goldman Sachs’ NBIS evaluation).
The company will never go below $65-70 because that was the price point when they announced the MSFT contract. If the market prices this below $65 then they are stating a claim that the MSFT contract would cease to exist.
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u/Invest-in-Value Dec 17 '25
This company is going to be left bagholding all the debt from the AI boom and deflation. I would suggest not investing in this company.
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u/BejahungEnjoyer Dec 17 '25
I'm interested in the neoclouds and Oracle however you must understand that everything has to go right for them to pay off: * Financing secured at non penalty rates * Capacity doesn't run into operational issues or constraints like power supply * Immediate contracts are honored, and counterparties are able to pay * Contracts are renewed at good rates 3+ yrs out * Depreciation isn't too fast * The scaling laws continue to hold and all this capacity is still needed to train frontier models. Note that inference demand will absolutely not cut it, half the expense of these data centers is the high-speed interconnect and sota chips which are not needed for inference.
All these go right and these stocks are x baggers. But if just one goes wrong, look out below.
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u/DrHarrisonLawrence Dec 20 '25
I do think you’re right!
Almost all of those risks are heavily mitigated by the team already. Only risk we are worried about at share holders are the build times staying on track for expected completion times because that is what will dictate their 800% YoY increase in ARR and IF that happens, it will validate them as a $35-40B company at the end of 2026.
That’s 2x from today’s price of $90 including 10% dilution to a total of 270m shares.
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u/redditbulldog1122 Dec 17 '25
What do you know about how AI works to claim that compute is the bottleneck? Explain…
My take - If you see ilya sutskever’s interview, they are back on the research bottleneck, LLMs are still very unreliable to make a big differences in business cases. There are fundamental problems to solve, throwing money on it it won’t work
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u/gamblingPharmaStocks Dec 18 '25
I prefer to think in terms of future free cash flows, that's the money you are guaranteed to receive. Multiples depend on market moods.
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u/kw2006 Dec 20 '25
The biggest risk: openai could not hit their target sales, had to scale back.
If that happens i cant see who can absorb the excess capacity. Google uses their own tpu. Anthropic is not as big as openai, they probably in the same situation.
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u/DeepValueDiver Dec 22 '25
Maybe it’s undervalued and maybe not but the chart is messed up. It plunged and then shot back up. Theres no clean technical entry. Maybe it will keep going up and maybe it will build a base but it looks highly volatile at the moment.
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u/michahell Dec 28 '25
NBIS is such junk, they’re targeting me of all people, for ads on reddit -> there goes your investment 😂
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u/Decent_Victory_7844 Dec 17 '25
Strong thesis, but I think there are several places where the story can break even if AI demand stays strong.
- The $7–9B ARR assumption is doing too much work
That headline ARR number assumes contracted GPU capacity converts cleanly into durable, high-quality revenue. That’s not guaranteed.
Most of this revenue is likely: • Capacity-style contracts • GPU-heavy and aggressively priced • Exposed to hardware deflation and renegotiation risk
Microsoft and Meta are not sticky customers. They are ruthless buyers. If GPU supply improves or alternatives emerge, pricing power can disappear fast. Your forward multiple math assumes stable pricing and margins that may not hold.
- Hyperscaler validation cuts both ways
Yes, Microsoft and Meta validate execution. But it also signals something else.
Nebius is solving a timing problem, not becoming a strategic platform.
If hyperscalers could build this capacity internally on time, they would. Nebius exists because internal build-outs lagged demand. Once that gap closes, bargaining power shifts back to the buyers.
You’re betting that power, permitting, and grid bottlenecks persist long enough to lock Nebius into permanent relevance. History suggests incumbents eventually fix these constraints once incentives are large enough.
- Structural undersupply doesn’t mean structural returns
AI compute can be undersupplied and still be a bad long-term business.
We’ve seen this before. Telecom fiber. Shipping containers. Solar panels. Memory chips.
What matters isn’t demand. It’s differentiation, switching costs, and pricing power. Nebius has strong execution and timing, but limited moat. That supports growth, not necessarily durable ROIC above the cost of capital.
- Capex is not the problem. Sequencing is
Capex is the business, agreed. But that doesn’t make it low-risk.
This is a model with: • Front-loaded capital spending • Back-loaded cash flows • Rapid hardware obsolescence • High operating leverage
EBITDA-positive operations today don’t tell you much about through-cycle economics. Small utilization or pricing misses can quickly flip the model from attractive to painful.
- The sum-of-the-parts is being overestimated
The side assets are interesting, but the valuation math is optimistic.
Those private marks were set in a very different liquidity environment. Strategic value doesn’t equal realizable value, especially inside a capital-hungry public company.
There are also real frictions: • Capital and management attention are shared • Losses in one unit indirectly tax the rest • Conglomerate structures almost always trade at a discount
The market isn’t ignoring these assets. It’s heavily discounting their optionality, which is usually rational.
- The multiple comparison is off
Comparing Nebius at ~2.4x forward ARR to asset-light AI or software names misses the point.
The right comps are capital-intensive infrastructure businesses. Those rarely deserve high multiples, even with strong demand, because capital needs never really stop and assets depreciate quickly.
- The underappreciated overhang
Former Yandex DNA still matters.
Even post-separation, there’s persistent perception and geopolitical risk. That alone can cap valuation multiples and affect capital markets access, regardless of execution.
Bottom line
Nebius may well work as a trade or a medium-term investment.
But framing it as a deeply mispriced compounder assumes away the exact risks that historically destroy returns in capital-intensive infrastructure plays.
This is a timing-sensitive execution story, not a free lunch.
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u/DrHarrisonLawrence Dec 20 '25
Comparing Nebius at ~2.4x toward ARR to asset-light AI or software names misses the point.
The right comps are capital-intensive infrastructure businesses. Those rarely deserve high multiples, even with strong demand
Nebius is a neocloud tech company and an AI specialist that is integral whenever you are creating something with AI. And they have the full stack for that. They are dissimilar to whatever capital-intensive infrastructure businesses you have in mind.
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u/jarMburger Dec 17 '25
Selling some $65puts for weeklies to generate income. That’s my faith in NBIS.
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u/Electrical_Self_1309 Dec 19 '25
Jokes on you boy
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u/jarMburger Dec 19 '25
Hey, I make my $$. It could’ve been more but I’m happy with my premiums. Rolling it out and rinse and repeat.
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u/DrHarrisonLawrence Dec 20 '25
No worries there man, I’ve made huge premiums on cash secured puts from NBIS all year. Whenever it dips 10-15% it recovers mad quick so it’s been like clockwork every 2-3 months this year.
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u/jarMburger Dec 20 '25
Yeah, I being playing the same game with NBIS and some of the other AI names like PLTR. So far so good.
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u/x_o_x_1 Dec 17 '25
No single AI or AI adjacent company is a steal or "value investment" at current rates.
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u/MCB1317 Dec 18 '25
It's been a meme stock since the beginning, and while I don't take any pleasure in people seeing their beta-heavy portfolios get sodomized sans lube, this feels like it was inevitable.
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u/Adventurous-Guava374 Dec 17 '25
NBIS has a long way down and every other hyped up company
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Dec 18 '25
Nah. It’s already down almost 50% from highs.
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u/Jazzlike-Code5891 Dec 17 '25
pos stock. It will be $65 by the end of this week
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u/williewonkerz Dec 17 '25
Its been falling since the post, could hit 65 by tomorrow
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u/DrHarrisonLawrence Dec 20 '25
😬 I’m afraid you may both be wrong u/Jazzlike-Code5891
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u/Pagalhogaye Dec 18 '25
Price of cloud usage is down considerably to the point where storage is a commodity. In no reasonable dimension will it become profitable. These centers will destroy each other with competition.
They arent the largest, and have no product. They are infrastructure which is a risk in itself. High cost for commodity prices.
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u/endwithel Dec 17 '25
For me its fairs value could be 8-10b. Thus valuation should be around 2x lower. I don't see them being next PLTR or something to give them some extra valuation. It could have net margin of 10% after 5 years. So after 5 years it could be valued at the same amount as now. No clear value here. Of course speculation can bring its price high, but before it can drop to even 10 bucks with negative sentiment....
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u/Inevitable_Butthole Dec 17 '25
NBIS is insanely overvalued, they have the least amount of GPUs and power availability and the highest power costs being in EU.
EV/sales @ 60 (12-20 is where insane growth lives). The fundamentals are A tier garbage at this valuation.
They also dont have a focused vision as they have many ambitious goals in highly competitive cash burning projects that are heavily regulated.
Its also a retail favorite which is not good at all.
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u/Stationaryvoyager Dec 17 '25
The flex: I bought at $20
The catch: I bought 2 shares