Jordan
Long-Term Stock Investor, Compounding & Portfolio Construction
Nebius's exceptional growth makes it the best way to gain data-center exposure while the AI-sector rally still has room to run after its pullback. The risk/reward looks super attractive here, but this is extremely risky compared with usual holdings and not necessarily a ten-year hold. x.comÂ
Nebius's first quarter showed improving unit economics, the key test after CoreWeave. Revenue rose 684% to $399 million, above the $317 million consensus, and adjusted EBITDA swung to $129.5 million from a $53.7 million loss, with $9.3 billion of cash on hand. It also secured 1.2 GW of power and land for a new AI factory in Pennsylvania and upgraded its contracted power from 3 GW to 4 GW, on top of multi-year deals with Microsoft and Meta and a $2 billion Nvidia investment. x.com x.comÂ
Nebius's world-class team makes it the neocloud most likely to keep attracting cheap capital amid high rates and AI anxieties, if any can. Its risk/reward looks good here despite today's decline. 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'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
Nebius has pricing power because its hard-to-build AI infrastructure and software serve enterprise clients who cannot find capacity elsewhere. It owns some data centers and land but has mostly operating leases; the share of active compute at owned sites is unspecified. It looks like the best infrastructure play despite slight skepticism about its path to profitability and valuation, and would work even if capex slowed 20% or the cycle paused. x.com x.com x.comÂ
Nebius is best positioned for the AI infrastructure boom because its roughly 400% revenue growth and strong execution accompany the least leverage among its peers. It is the neocloud pick by a mile: CoreWeave and Oracle are overleveraged, while IREN looks inferior and unproven. 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
Long term, Nebius is an absolute scaling juggernaut and has earned best-in-class status among neoclouds. Short term, the AI correction is over and the shares are sitting on summer support. x.comÂ
Nebius's projected growth makes its simplified valuation around $135 very interesting. Estimates are easily around $13 billion in 2027 and $27 billion in 2028, with roughly 7x 2027 EV/EBITDA at that share price. Company-specific factors also appeal. 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 looks attractive because active accumulation is clear despite a four-month decline of 40% from its all-time high. The correction may not be finished, but the buying volume supports accumulating through it. x.comÂ
