Michael Wiggins De Oliveira
Deep Value Returns, Equity Investing without Options or Leverage
Nebius at 5x next year's sales will look like a clear bargain in hindsight if management executes anywhere close to plan, supporting a $300 target by end-2027. It is growing at absurd rates while customers increasingly help fund the infrastructure behind that growth. The past 90 days of volatility have been frustrating, but the opportunity remains very enticing. x.comÂ
Nebius is already generating extraordinary cash flow early in its growth cycle, over $2 billion of inflows while scaling aggressively, supporting a raised $300 target by end-2027. That strengthens the case that it becomes a self-sustaining AI infrastructure platform by 2027, despite a slightly lowered near-term revenue outlook, as investors underestimate AI demand and Nebius's ability to monetize it. Expect meaningful volatility, as enormous capital needs will likely bring more dilution. 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
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 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 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 already-raised cash and expected customer prepayments should buffer its 2027 plans against a short-term debt-market freeze. Rising GPU rental prices could put new deals at $35m+/MW annually, up from last quarter's $20m-$25m, reducing estimated payback from 22 months to around a year. If Nebius deploys 1 GW next year at a one-year payback, equity value creation could be tremendous. 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'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 could reach $3,000 a share by 2030 as AI compute economics improve and it deploys at least 5 GW of capacity. Revenue per MW has risen from about $10 million to $20-25 million on long-term contracts and $40-50 million short-term; its first auction cleared 15% above its prior high. At $25 million per MW, 5 GW yields $125 billion of revenue, and a 25% net margin $31.25 billion. With 1.5-2 GW added yearly, 30x earnings and about 25% dilution imply roughly $3,000. 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
Nebius's $40B-plus customer commitments and funding resources make its growth seriously underappreciated, despite financing risk. Q2 revenue grew 454% to $582M; Microsoft and Meta contracts total $29.4B, with another potential $15B from Meta. Against roughly $5.7B of Q2 capex, Nebius had about $8B cash, expects over $9B in 2026 customer prepayments and subsequently raised about $5.75B in convertible notes. It is one of the more compelling long-term AI infrastructure opportunities right now. … Show more
