Deep Value Investing
Value Investor, Long-Term Compounding
Nebius insiders are selling while promoting the company, and their actions matter more than their words. The CEO says Nebius could sell its entire 2027 capacity today while he and directors keep selling shares, the same pattern as Micron's CEO touting endless memory demand while selling stock and Michael Saylor calling for $1M bitcoin after selling 5,000 BTC. x.comÂ
SpaceX's planned tenfold neocloud expansion and tightening financing could pressure Nebius. Musk says debt markets have nearly shut for companies without substantial non-AI-data-center revenue, implying consolidation among the 200-plus neoclouds. Nebius looks less appealing than SpaceX, and picking a battle with Elon is not attractive. x.com x.comÂ
Nebius's recently signed higher-margin deals are predominantly with pre-revenue neolabs, making it aggressive to project a few small, short-term contracts' economics across all available capacity for years. Short-term economics are very attractive now, and Nebius management has better insight into demand, but assuming all these customers renew at similar or better terms indefinitely seems unrealistic. x.com x.com x.comÂ
Nebius's current margins leave virtually no valuation support for its shares. It should do well over the medium term, but remains a high-quality speculative story with massive execution risk. x.comÂ
Nebius can fall with neocloud peers because the market prices sector risk rather than each company's quality. Nebius and SPCX are better companies than 99% of the others, yet Nebius would not be immune to a WOLF or CoreWeave default; some weaker names may never recover. x.comÂ
Nebius looks like a clear stock promotion rather than a viable for-profit business, much like Oklo. A quoted skeptic questions valuing Nebius on EBITDA when everything hangs on debt and its largest asset, GPUs, is short-lived. Bulls hold their view, and reality will come for them in due time. x.comÂ
Nebius's revenue growth has sharply outpaced its stock, compressing its forward valuation to the lowest since its IPO. Quarterly revenue rose from $146M to $582M over a year while the stock gained about 50%; forward EV/revenue fell from 24x to 6.5x. x.comÂ
Nebius's deepening cash burn puts its financial health in doubt. Trailing free cash flow sank to about negative $5.9 billion by June 2026, even as trailing net income was positive $61.6 million. x.comÂ
Neoclouds may face a financing squeeze that extends their stock declines over the next few weeks. Elon Musk says debt markets have almost entirely shut off funding for companies without substantial revenue outside AI data centers, and expects widespread neocloud failures and consolidation. Nebius, CoreWeave, IREN and Applied Digital are the stocks in question. x.comÂ
Nebius looks cheaper against a year of stronger execution, leaving room for its shares to rise. EV/current ARR fell from 57x to 14x as quarterly revenue rose from $105M to $582M and adjusted EBITDA moved from -$21M to +$236M. The 5GW figure is a year-end contracted-power target, not live capacity. Per Polymarket, Dutch government AI plans could favor Amsterdam-based Nebius. Delivery still needs capital and power; Nebius borrows at about half CoreWeave's cost and gets customer prepayments. x.com … Show more
Temporarily constrained financing makes Nebius's buildout look very negative, with even completion of what it already has in question. CEO Arkady Volozh said some capital sources, such as debt and asset-backed financing, may be temporarily closed; customer advances and other instruments will probably fund at least this gigawatt. x.comÂ
