Sam Badawi
Stock Analyst, Creator of Origins of Alpha & Quarterly Conviction
Neoclouds such as Nebius, CoreWeave, IREN and TeraWulf remain long-term winners because cheaper, better AI models drive more compute use, not less. Per early testing by @Signal_65, GPT-6 Astra completed 279 of 280 enterprise tasks with zero fabrication, cutting weighted errors about 51% versus Claude Fable 5.1 at lower cost. Enterprises are deploying far more agents, pushing the upper end of 2028 capex estimates for the five biggest hyperscalers toward $1 trillion. x.comÂ
AI infrastructure ROI should arrive much sooner than the market expects. Amazon, Microsoft, Alphabet, Meta and Oracle raised 2026 AI capex to nearly $800B not because cheap models solved AI, but because performance, latency and ROI still matter. Fears around Kimi K3 overlook that; per @WarrenPies, K3 takes significantly longer per completed task than Opus 5 or GPT 5.6. x.comÂ
AI agents' productivity over human labor should lift GPU demand and rates for neoclouds. The bottom looks in for CoreWeave, Nebius, Boost Run, Sharon AI and IREN. Gavin Baker says token prices can fall as revenue per GPU rises; paraphrasing Elon, even $38 per GPU-hour can pay off. CoreWeave's five-year fixed contracts may lag current rates; Boost Run has less capacity locked in. If SpaceX takes more growth, slower cash burn could rerate neoclouds, though smaller customers may pay less. x.com … Show more
Nebius' software efficiency and a possible end to heavy AI financing support a re-rating. Per @DrTomsLens, its engineers got about 43% more video output from the same GPUs, cutting compute cost per second by 30%; newer hardware alone is not enough without capable software teams. Oracle expects to fund growth from free cash flow in FY2029, suggesting capital-heavy AI providers may eventually outgrow debt and dilution. Google Cloud reported 103% revenue growth amid strong AI infrastructure demand. … Show more
Global resistance to data centers could constrain December cloud growth despite the longer agentic AI buildout. Some estimates say roughly 120 US projects worth over $130B face delays; opposition spans the UK, EU, Australia and Malaysia too. Microsoft, Alphabet and Amazon remain favored, though guidance is at risk. CoreWeave, Nebius and IREN may bounce hardest short term but look weak longer term as funding tightens; Elon Musk expects extensive neo-cloud consolidation. x.com x.com x.com x.comÂ
Premium-model inference revenue could support much higher compute pricing for AI infrastructure providers. Evercore models over $120M/MW in potential lab revenue while labs pay roughly $30-50M/MW for compute. With power and GPUs scarce, SpaceX AI, Nebius, IREN and CoreWeave can capture the biggest uplift over historical pricing if they deliver contracted high-density capacity. x.com x.comÂ
Faster-than-expected AI computing price increases challenge fears of too much capacity too soon. Nebius reported that pricing trend. x.comÂ
Nebius's integrated AI cloud offers a substantial long-term opportunity beyond simply controlling powered land as training and inference demand expands. It builds data centers and GPU clusters and runs networking, storage and customer software; Microsoft and Meta have multi-year commitments. The correction after a 10x rise is unfolding, but deeper price targets have not been reached; the next 6-12 months could offer a more attractive entry than near the highs. x.comÂ
AI infrastructure need not repay the entire late-decade buildout by 2030 because buildings and GPUs have years of earning life left. On an accrual basis, estimated revenue needed through 2030 is $4.3-5.1T, not Gartner's $8.5T, versus its $3.6T ceiling for AI revenue tied to data centers. Oracle's and CoreWeave's booked contracts also challenge Gartner's market sizing. For Nebius and TeraWulf, capital remains a risk; Nebius also faces renewal pricing into the 2027-28 supply wave. x.comÂ
Anthropic's customer spending and compute buildout show AI monetizing at scale, a bullish read-through for Nvidia, Broadcom, Alphabet, Amazon, Microsoft, Nebius, CoreWeave and Hut 8. Its IPO filing reports H1 revenue up 14-fold to $16.3B, 11,900+ customers spending $100K+ annually and 1,900+ spending $1M+, alongside $9B in H1 infrastructure spending and about $430B in future compute commitments. x.comÂ
Nebius' business model faces pressure once GPU supply and demand normalize, perhaps within five years. It faces enormous supplier power, more competitors and likely rising buyer power, and lenders and equity investors may view it differently once utilization and pricing stop being exceptional. China could flood global markets with low-cost compute, and the market already seems to price a very long AI boom. The case weakens if AI demand proves durable, like an 18-year real estate cycle. x.comÂ
Nvidia's CUDA retains developers, putting it among 12 stocks that could dominate the decade ahead. Nebius's GPU rental price rise signals demand; Fabrinet and Credo supply AI connectivity. DraftKings has betting scale; Microsoft has Azure and an OpenAI partnership; Figma anchors design work; Shopify powers stores. TeraWulf pivots power sites to AI leases; Constellation, the largest US nuclear operator, signs big-tech power deals; Meta spends on AI; Uber has autonomous-vehicle partnerships. x.com … Show more
