Nebius Group (NBIS)

An AI infrastructure story and a growth story. It sold off 40% from its recent high. Volatile, but thinks it will snap back quickly.

They owned it when it was called Yandex, something like the Google of Russia. The company moved to Israel and the Netherlands. Nebius specializes in building out a full AI stack. It has legs with a $19 billion deal with Microsoft which gives them cash flow. The recent META announcement has created competition which caused the drop. It's starting to come back now.

Nvidia owns a stake in the company and earnings are set to growth even faster than CoreWeave's. They have a 5-year deal with Meta worth up to $27B. MSFT is also a big customer. Is up 150% this year.

Main competitor is CRWV. But META news yesterday also makes it a new competitor. The cloud-as-a-service space is getting much more crowded and competitive. Economics won't be as strong as in the prior cycle. Not necessarily the end of the trade, but good time to take some profits.

Reported this morning, up 15% last he checked.

Think of them as intelligence farms and data centres. You can get a lot more $$ from renting the GPUs than people had thought, and the assets don't depreciate as quickly as feared. There's just so much demand.

CRWV was contentious when it came out, as it was a race between its interest expense on debt versus revenue generated from renting out compute. 

Likes both, prefers NBIS. A bit more responsible with its balance sheet.

It reports Wednesday. Is up 111% this year. They a have major $2 billion deal with Nvidia to develop knowledge factories.

Hybrid, full-stack, AI cloud platform. $27B order from META. His price target is $177.

Has done well. Be careful. Not a long-term hold. There's a reason MSFT is renting from them and not building the data centres themselves. It's a commodity business over time. Not the best proposition in the value chain.

Tactically, the golden time to own. So hold on, don't trim yet. But keep an eye on the trigger for when to get out.

He once called this too speculative, but they've been winning a lot of orders.