Here is Why NBIS is an Asymmetric Opportunity?
I bought $NEBIUS(NBIS)$ before it was popular at $20 per share.
It's already 5x for me.
This is only the beginning as they have just announced a massive $17 billion deal with Microsoft.
It can easily make another 5x from here.
Here is why NBIS is an asymmetric opportunity: 🧵
A logo with the word "NEBIUS" in bold, dark blue, sans-serif font on a bright yellow background.
1/ $NBIS is an AI infrastructure company.
This is a very hard market; it requires:
- Hardware expertise.
- A lot of capital.
- High demand.
NBIS has all three.
2/ So, what does NBIS exactly do?
It inherited Yandex's data center business and turned it into a neo-cloud business tailored for AI workloads.
It has hardware and software layers.
In the hardware layer, they use exclusively $NVIDIA(NVDA)$ GPUs and build their own servers.
In the software layer, they have built a cloud platform pre-configured for AI workloads.
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3/ Its data centers are focused mainly on the US and Europe.
Most of the capacity currently comes from the data centers in Finland and France.
The data center in New Jersey will be online before this year ends, and it is currently building new data centers in the UK.
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4/ Its data centers are state-of-the-art.
Their custom servers allowed them to use natural air cooling in the Finland Data Center, resulting in significant energy efficiency compared to liquid-cooling.
This drastically reduces cost, and $NBIS passes the savings to customers.
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5/ Their servers were designed from scratch for GPUs.
All their servers use InfiniBand networking, which offers way higher bandwidth and lower latency compared to Ethernet-based servers.
This makes their platform extremely useful for low-latency workloads like AI inference.
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6/ Custom servers and data-center architecture drive cost leadership.
Air-cooling, combined with their custom server designs and exclusive use of InfiniBand networking with $NVDA GPUs, drives cost savings.
Thus, their GPU/per hour prices are 20-25% lower than the competitors.
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7/ They have a rapidly growing capacity.
They currently have around 7MW connected capacity, and they are targeting 225MW by the end of the year.
The management guides for 1GW contracted capacity by the end of next year.
8/ Revenues will explode once the contracted capacity turns to connected.
At the current market rates for GPU/per hour, they can easily generate around $8.5 billion in revenue even if we assume just a 70% utility rate.
Yet, this is just the beginning..
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9/ They have just announced a partnership with MSFT.
It just announced $17.4 billion, 5-year deal with Microsoft, meaning $3.48 billion ARR.
This will instantly get their 2026 revenue above $5 billion, given that they are targeting $1 billion this year, excluding MSFT.
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10/ $Microsoft(MSFT)$ deal will finance their further expansion.
Assuming just 2GW connected capacity by 2030 and the same conservative 70% utility rate, it'll generate $17 billion in revenue.
Assuming 30% net margin (lower than AWS margins), it'll generate $5.1 billion net income.
Slap a conservative 25 times earnings, and we get a $127 billion company.
It's currently valued at $23 billion, offering a 5.5x return in just 5 years.
$NEBIUS(NBIS)$ is one of the most asymmetric plays in the market.
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