🇺🇸 Screenwriter, Member Writers Guild of America West, M.F.A. USC Cinema, Juris Doctor, Tech Investor * Not a Financial Advisor (Always Do Your Own Research)
Texas, USA
Joined December 2012
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$NBIS : The Deals Pay for themselves in Only 22 Months 🔥
$NBIS shareholders, sleep easy
Nebius plans to switch on 1GW of AI data center power EVERY year from 2027.
Its recent deals pay $20M+ per megawatt each year.
1GW = 1,000 megawatts = $20B+ a year in revenue.
And those deals pay for themselves in under 2 YEARS.
The whole company is worth $43B today.
You do the math.
$NBIS : Today Tech Analyst Dan Ives said we are still in the third inning of the Ai Revolution with roughly seven more years of the Ai buildout still to go🔥
youtube.com/watch?v=MXv_BPxJ…
$NBIS: FUD vs REALITY
FUD: No more debt financing is available — the credit window for neoclouds is shut.
Reality: Within days of this doom FUD Nebius announced a $3.5 billion senior secured facility from Citi (364-day bridge, starting at Term SOFR + 2.75%, capped at +3.50%). This follows a $775 million GPU- and contract-backed facility (SOFR + 2.50% to 2030). And yesterday a new €250M loan was secured for Bethune France. The company cites more than $40 billion in long-term contracts with investment-grade customers (including Microsoft and Meta) that can support additional asset-backed financing, plus substantial customer prepayments that cover a large share of related capex. So the reality is financing access remains open on attractive terms.
FUD: This is an AI bubble — demand will collapse and GPU prices will crash.
Reality: GPU rental prices keep rising. Nebius raised on-demand rates effective October 1 (H100 roughly +17% to $4.50/hr, H200 +20%, B200/B300 up similarly). Its CRO has said prices are rising faster than expected, 2027 capacity would sell out if brought online, and a similar dynamic could extend into 2028. Older chips (A100s, H100s) are pricing above levels from when they were new. Elon Musk / SpaceX has described a lasting shortage of superintelligence compute, with rivals wanting capacity, strong pricing power, and aggressive buildouts (targeting roughly 13 GW of compute by the end of 2027). Demand is not cooling.
FUD: AI infrastructure isn’t profitable — it’s just endless cash burn.
Reality: In Q2 2026, Nebius’s core AI cloud business (≈98% of revenue) delivered an adjusted EBITDA margin of ≈50% (49.7%, or ~$286 million on $575 million of AI cloud revenue). Group adjusted EBITDA was $236 million on $582 million of revenue (~41% margin), up sharply from a loss a year earlier. Revenue grew 454% year-over-year, ARR reached $3 billion, and management reaffirmed guidance for ~40% group adjusted EBITDA margins, $3–3.4 billion full-year revenue, and $7–9 billion year-end ARR. Pricing and utilization are improving, not deteriorating.
FUD: Customer concentration and hyperscaler competition will kill the model.
Reality: Large contracts with investment-grade customers (Microsoft, Meta, and others) provide multi-year visibility and prepayments that de-risk buildouts. Nebius is also signing billions worth of deals across other major AI labs, quant firms, and enterprises while expanding its software/stack offerings. Hyperscalers are simultaneously capacity-constrained and still renting externally, so the shortage narrative from SpaceX and others reinforces that external supply remains valuable.
FUD: Capex is unsustainable and will force massive dilution or distress.
Reality: Capex is large ($20–25 billion guided for 2026) because demand is pulling capacity forward. The market got spooked by Coreweave 10X1 debt to cash balance but Nebius balance sheet is roughly 1X debt to cash! Nebius funding is diversified across customer prepayments (covering 50–60% of related capex on many deals), operating cash flow, convertible notes, and the new secured facilities. The company has repeatedly demonstrated the ability to raise capital on non-dilutive or attractively structured terms while maintaining a substantial cash position. Nebius keeps building the right way by respecting the balance sheet.
Bottom line: The dominant FUD narratives treat Nebius like a pure high-risk story with closed funding markets, evaporating demand, and structurally unprofitable economics. But the operating and financing REALITY shows the opposite… a company with strong core-cloud margins (~50% adjusted EBITDA), rising prices, sold-out or sellable capacity, multi-billion-dollar contracted backlog, elite clients/partners including Meta, Microsoft Nvidia and Palantir and continued access to debt and prepayment funding.
NFA - Always Do Your Own Research
$NBIS : The Mechanics of FUD courtesy of @demian_ai
there's a lot of FUD on the timeline this week, so i went back to my favorite story about how fear actually spreads.
three schoolgirls on a train once started a run on a perfectly healthy bank.
Japan, December 1973.
one of the girls had just landed a job at Toyokawa Shinkin, a small local bank. her friends teased her that banks were "dangerous" (they meant robbers).
it was a joke. she didn't take it as one.
that night she asked a relative if it was true.
The relative asked someone else, and the question passed from family to family, through a beauty salon, picking up weight as it went.
Then a man borrowed a shop phone and told someone to withdraw 1.2 million yen for a routine payment. a listener overheard and assumed he knew something.
now the rumor had a witness.
a taxi driver later traced how the story changed in a single day:
- afternoon: the bank "might be in danger"
- 2:30: "it is in danger"
- 4:30: "it will go into bankruptcy"
- night: "its shutter will never be lifted tomorrow"
nobody added a single fact, each retelling just dropped a hedge.
by the end, more than a billion yen had walked out the door. The Bank of Japan rushed in cash and stacked it a meter high in front of the vault so people could see it with their own eyes. Police went looking for the crime behind the rumor and found nothing, the bank had done nothing wrong.
so why does the scary version always win?
because a loss feels about twice as strong as an equal gain. Psychologists have measured it for decades. Standing in line costs you an afternoon, but being the one who stayed could cost your savings. with that trade in front of you, running is the rational move, even when the bank is fine.
which brings me to this week.
the timeline is busy with stranded compute and debt stories. Those are fair questions, and some builders will deserve them, but the rumor doesn't check who, it hits everyone standing closest.
so do what the Bank of Japan did, skip the gossip and go look at the vault.
is the power actually connected?
are the customers actually signed?
is the money already there?
those answers don't change because a post went viral. They change slowly, in substations and contracts and concrete.
and that work didn't stop this week. If the cranes are still up, the racks are still getting installed and the demand that started all of this is still there.
a run doesn't make a bank unsound, it just tests whether it was.
Toyokawa survived, the ones building on solid ground usually do.
Mark Hogan retweeted
🚨 $NBIS Update: Nebius raises another €250M for its Béthune Data Center 🇫🇷
Debt markets may be closed to neoclouds.
For the thousandth time, Nebius isn't a neocloud. It's an AI Cloud.
Don't be a headline guzzler. Do your homework.
💰 Nebius lève encore 250 millions d’euros pour son data center près de Lille, dévoile @thierrymestayer.
Le site que le géant néerlandais du cloud prévoit d’ouvrir fin 2026 sera l’un des plus puissants d’Europe.
l.linforme.com/ye2vfe3z
$NBIS JUST IN: Autotech Names Nebius Subsidiary Avride 2026 Autonomous Vehicle Solution of the Year 🔥
$NBIS: Holding Nebius Through Multiple Massive Drawdowns 🔥
Not for the faint of heart, Nebius has now logged its fourth ~40%+ drawdown in the last ~1.5 years :
• ~54% ($44 → $20)
• ~36% ($130 → $83)
• ~35% ($286 → $184)
• Current ~45% from the June 2026 peak of $286.69 to ~$159
These are violent swings, but in tech investing they are certainly not unique.
Let’s take a look at Nvidia which has also had multiple major drawdowns since 2017 (these are in split-adjusted prices):
• 2018: ~56% (peak ~$7.15 → ~$3.14) — crypto crash + trade tensions
• 2020: ~38% (COVID crash)
• 2021–2022: ~66% (peak ~$33.23 → ~$11.19)
• 2025: ~37%
So if I’d bought 100k worth of Nvidia at the start of 2017 (~$2.51) and held through every one of the drawdowns, I’d have roughly $8.4 million today (at ~$211).
Price swings feel exhausting and existential in real time. The fear is real, the emotions surge during these drawdowns, the paper losses hurt but it’s during these times that you must stress test the thesis imo. You must ask if the drawdown is due to a structural collapse of the business or is it FUD and sentiment-based?
Elon said no neocloud will be able to get financing unless they have another profitable business, and yet the reality is Nebius just announced a $3.5B credit line with Citi at ~6.5%. I like what I see here. A solid 1X debt to cash balance sheet, core Ai cloud adj EBITDA at ~50% now, 22 month pay back on GPU that are seeing an 8+ year contracted life and the new asset lite business model…
What the company is actually building matters far more to me than stock price fluctuations over a multi-year investing horizon.
Nebius is still early in scaling AI infrastructure and the Ai cloud business. I think Q3 will set the bullish trajectory for end of 2026 into 2027…
NFA - Always Do Your Own Research
$NBIS JUST IN : Nebius client Meta to raise up to $95 Billion for Ai Expansion 🔥
Per Reuters Today:
$NBIS : Nebius clients/partners include Meta, Microsoft, Nvidia and Palantir 🔥
$NBIS : A 49.7% core EBITDA margin, a 22-month payback and customers prepaying half the capex 🔥
That’s the business, that’s the story
$NBIS @realroseceline
Good framework, but it fits any capital-intensive company. Every question in it has a number for Nebius, and the essay doesn't use one. Most are in the Q2 letter.
Returns vs cost of capital. The scoreboard you ask for, cash returned per dollar invested, is close to one Nebius already discloses. Payback on Q2 deals is 22 months, capex and operating costs included, down from 2-3 years historically. That's ~55% of the capex back each year. If the GPUs were worth zero after a 3-year contract, that's still a ~29% unlevered pre-tax IRR. The money funding it: converts at 0.50% and 4.50%, Citi at ~6.6%, an asset-backed loan at SOFR + 2.50%. That's well above your 12% example, funded far more cheaply.
Timing. In H1 2026 customers prepaid $4.4B, funding 54% of Nebius's $8.1B of capex ahead of delivery. ~70% of Q2 deals had prepayments covering 50-60% of capex. The cash-before-revenue problem you describe is largely being paid for by customers.
Obsolescence. Servers are depreciated over 5 years, and the payback figure is cash with capex included, so it doesn't lean on EBITDA. The market also says older chips are holding value: Nebius's older-generation GPU pricing rose 30%+ QoQ in Q2, and Crusoe's CEO said last week A100s rent above 2020-21 levels and H100s above their 2023 launch. With a 22-month payback, the capex comes back well inside the depreciation life and inside any contract of 2+ years. Whatever the GPU earns after that is margin.
That also answers your $2B vs $10B FCF question. A ~55% annual cash return on hardware that costs ~20% a year to replace is the $10B world.
Pricing. The 10x demand / -80% price example mixes price per token with price per MW. Tokens get cheaper because each MW produces more of them, which cuts the provider's cost per token too. Nebius rents MW, and revenue per MW is rising: $20-25M on Q2 deals, $40-50M+ short-term, a first auction 15% above its best Blackwell price and the latest one higher again. Rubin is ~$40B per GW of NVIDIA hardware vs ~$25B for Grace Blackwell, so it has to rent for more.
Operating leverage. During a contract, utilization risk sits with the customer. The contracts are take-or-pay, and management says the short-term deals and auctions are too.
Contracts. The trade-off you describe is how they already run it: long-term investment-grade contracts for the floor, short-term deals and auctions for upside, and part of 2027 held back on purpose though management says it could sell all of it on current terms.
Competition. A glut needs cheap capital and power. Lenders are rationing capital to the strongest operators right now, and new power takes years to connect. The telecom bust happened with most fiber dark. This month SpaceX said on its call it couldn't rent GB300s, GB200s, TPUs or even H100s from other clouds. SemiAnalysis rated 77 GPU clouds last month and only CoreWeave and Nebius made Platinum, above Google Cloud, Oracle and Azure.
Value capture. Microsoft and Meta are the kind of companies your essay expects to capture the value, and both signed multi-year deals with Nebius rather than wait to build it all themselves.
Dilution. Nebius sold its 12.7M ATM shares at ~$224, and its August converts convert at ~$313 and ~$325, about 2x today. My per-share targets take the count from ~309M shares today to ~432M by end-2028 with every convert treated as stock, and still get ~$1,190.
Where I agree: none of this is proven over a full cycle. Execution is the real risk, getting 1 GW+ a year online on time, and post-contract pricing has to hold. But "great business or great story" doesn't need to stay philosophical. A 49.7% core EBITDA margin, a 22-month payback and customers prepaying half the capex is more evidence than the essay allows for.
Mark Hogan retweeted
We estimate there will be another 800-1,000 datacenters built in the US over the next few years..this will be a Game of Thrones battle in the tech world to secure compute power. SpaceX is aggressively building out its hyperscaler infrastructure vs neoclouds and cloud players 🏆🥊
Mark Hogan retweeted
Insane that people still don't get it. If Elon's tea leaves are true, this could not be more bullish for $NBIS.
200+ of these neocloud guppies go belly up, compute scarcity gets even worse, right as agents send demand exponential.
Even less compute comes online than anyone modeled.
And no, Elon isn't hitting 13GW+. He's not buying up neoclouds. Half of what he does bring online is for internal use anyway.
Who's left standing when the dust settles? You know my answer.
Unlike so many of these other players, $NBIS doesn't have a capital issue for financing 1GW+ of buildout in 2027.
This is a bit pointless since $NBIS isn't a neocloud anyways but humor me.
1. Meta Backstop. At 70% LTV this can finance ~175MW of Rubins @JensenHuang's stated 60M/MW buildout cost.
2. Customer advances. 70% of 2027 deals signed in Q2 contained 50-60% prepayment terms.
3. Half of ATM facility remaining.
4. Ability to tap bridge financing similar to Citi facility for short-term GPU procurement for individual site.
Delivery → racking → monetization. Then roll into ABF at maturity against $40B backlog of hyperscaler commitments ($25B if you take out $META backstop).
Pretty much.
As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers.
SpaceX closed $40B of debt for GPUs, but we’re investment grade and have Starlink & launch revenue.
That means the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many.
Mark Hogan retweeted
Elon: “As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers.”
$NBIS a couple of days ago:
Pretty much.
As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers.
SpaceX closed $40B of debt for GPUs, but we’re investment grade and have Starlink & launch revenue.
That means the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many.
Mark Hogan retweeted
Again, not sure why this even has to be said but he’s not talking about $NBIS here
I’m losing a lot of brain cells from these doom posts..
Pretty much.
As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers.
SpaceX closed $40B of debt for GPUs, but we’re investment grade and have Starlink & launch revenue.
That means the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many.
Mark Hogan retweeted
$NBIS is not a neocloud….
We’ve secured a $3.5 billion financing facility from Citi to support our global growth.
The facility provides capital at attractive rates, diversifies our capital structure, and gives us greater flexibility over when and how we raise long-term financing.
Full release: nebius.com/newsroom/nebius-s…
Mark Hogan retweeted
$NBIS just secured a $3.5 Billion from Citi days ago. If what Elon says is true $NBIS should pump tomorrow in a logical world. It proves they are top dawg.
As for the others, Elon is not a neutral observer in this sector. Anything he says now has a motive behind it.
I’d take anything he says about his competition here on out with a grain of salt.
JUST IN: Neocloud stocks are trading higher on Liquid despite @elonmusk warnings of a financing squeeze and widespread failures.
Musk says debt markets have almost entirely shut off funding for companies without substantial revenue outside AI data centres. He predicts that only a minority of the industry’s 200+ neocloud providers will survive, with failures and consolidation ahead.
His concern is that developers could lose access to financing before finishing their facilities, leaving expensive computing capacity stranded in partially completed data centres.
Musk contrasted that with SpaceX, which he says closed $40 billion of GPU-related debt financing because it has investment-grade credit and established Starlink and launch revenue.
He also rejected speculation that SpaceX wants to acquire struggling operators: “SpaceX is not buying any neoclouds. Pointless.”
For now, the listed names are holding higher. Liquid perp prices versus Friday’s cash closes, as of 6:50 PM ET:
• $CRWV: $54.24 → $55.351 (+2.05%)
• $IREN: $24.91 → $25.336 (+1.71%)
• $NBIS: $158.74 → $160.80 (+1.30%)
Will these gains hold up?
$NBIS : The Ultimate Bear Trap?
This recent sell off in Neocloud & Data Centre stocks is one of the biggest bear traps I have witnessed.
It is so obvious that this is a bear trap given the huge demand for their services, the increasing prices of GPU and the timing of the sell off.
This sector will be the next bottle neck of the AI build out and this buying opportunity will likely prove to be one of the best.
$NBIS : I’ve been holding through this same Wall Street market maker playbook for multiple 40% Nebius drawdowns and then comebacks. Unless the thesis actually breaks it’s just the same playbook over and over, folks, and they make it work every time
