re: Nebius - NBIS - AI Infrastructure Company

Do I really. You know what I’m referring to

Qualitative Adjustments:
- Option Value: The $2B expansion is a real option—value it using Black-Scholes (volatility ~40%, time to expiration 2 years) for ~$0.5-1B added PV.
- Strategic Premium: This deal de-risks Nebius (validates tech, attracts more hyperscalers) and enables cheaper financing (~2-3% lower rates), adding ~$0.5B in efficiency gains.
- Risks: Termination clauses (e.g., material breach after 60 days) or GPU supply issues could haircut 10-20%.

Deal Value Range: $8-10 billion NPV today, implying a strong ROI for Nebius (funded via ~$5-6B CapEx, yielding 50-60% IRR). This is conservative; analysts like those at BWS Financial see it as a "transformative de-risker" worth more due to follow-on contracts.

Step-by-Step Integration
1. Build a Full Company Financial Model:
- Core Business (Ex-Deal): Project $1-2B revenue in 2026 (from >1GW power capacity by end-2026, serving startups/enterprises). Margins: 50-60%. Include $500M+ annual CapEx for expansion.
- Add Deal FCF: Layer in the $17.4-19.4B contract as above ($2B+ annual FCF by 2027).
- Total Projections: 2026 revenue ~$5B (deal + core), scaling to $10B+ by 2030. Terminal growth 5% (AI market tailwinds).

2. DCF Valuation:
- Discount all FCF at 11% WACC. Terminal value (Year 5 FCF × (1+5%) / (11%-5%)) = $50-60B PV.

- Enterprise Value (EV) Example:
| Component | PV of FCF ($B) | Notes |
|-----------|----------------|-------|
| Core Business | 15-20 | High-growth, but riskier (no contracts yet) |
| Microsoft Deal | 8-10 | Contracted, lower discount (9-10%) |
| Other Segments (Toloka, etc.) | 2-3 | Stable, low-growth |
| Total EV | 25-33 | Plus $1B net cash/debt adjustment |
- Equity Value: $26-34B (implies $110-140/share). Bull case ($40B EV): If deal expands and wins 1-2 more hyperscaler contracts.

3. Multiples Check:
- EV/Forward Sales: Apply 8-12x to 2026 sales ($5B) = $40-60B EV (premium for deal visibility; peers like CoreWeave at 15x post-Microsoft deal).
- EV/EBITDA: 50-70x 2027 EBITDA ($1.5B) = $75-105B (overstated due to current losses).
- Adjust for Deal: Adds 0.5-1x multiple premium (strategic validation reduces beta by 0.2-0.3).

4. Sensitivity and Risks:
- Upside: More deals (CEO expects "more to come"); Nvidia investment/priority GPUs boost margins to 70%.
- Downside: AI hype cools (10% haircut), CapEx overruns, or competition from AWS/Google (20% risk).
- Scenario Range: Base $30B EV ($125/share); Bear $20B ($85/share); Bull $50B ($210/share).

Quick Valuation Formula
For a back-of-envelope:
NBIS Fair Value = (Core EV + Deal NPV) / Shares Outstanding (~240M)
= ($18B core + $9B deal) / 0.24B = ~$115/share.
To arrive: Project FCF as sum of segments, discount via NPV = S [FCF_t / (1 + WACC)^t], add terminal value.

This deal catapults Nebius's valuation from "speculative AI play" to "hyperscaler-adjacent powerhouse," but watch execution (e.g., Q3 earnings). Consult a financial advisor for personalized modeling—tools like Excel or Python (with numpy for DCF) can refine this.

I mean, the playbook is clearly laid out in this thread.


I’ll keep it simple

Buy NBIs under 100 if you even see it. 102 for sure

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Since maybe we all need reminders

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Arkady Volozh, founder and CEO of Nebius, said:

“Nebius’s core AI cloud business, serving customers from AI startups to enterprises, is performing exceptionally well. We have also said that, in addition to our core business, we expect to secure significant long-term committed contracts with leading AI labs and big tech companies. I’m happy to announce the first of these contracts, and I believe there are more to come. The economics of the deal are attractive in their own right, but, significantly, the deal will also help us to accelerate the growth of our AI cloud business even further in 2026 and beyond.”

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fricking cracks me up that servicing Microsoft isn’t even their core business. It’s like a huge bonus do they can get even better at the core business of AI start ups.

From the tweet above:

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Nebius is a screaming buy and a once-in-a-generational company in the marketing as a $26B company and $100/share.

We've seen this play with Robinhood, when they would have 50% below MC price targets, hit-pieces when share price was $20. Yet Robinhood grew from $150m quarterly revenue to $950m-1B, and market cap went from $15B to $130B and then became the darling of Wall Street.

Wall Street and institutional investors see this clearly with Nebius for the next year but don't have large positions yet.

However, retail only sees the dropping price, sensationalist articles about Oracle losing $100m trying to enter the space, and the current 100M revenue numbers instead of the projected $1B+/quarter.

So, even if price can seem like they're dropping off marginal trades are executed at lower prices, even if more shares get bought:

1. Retail panic-sells, gets margin liquidated.

2. Mechanical hedging from MM's from short-dated options (couterparty to retail selling CSPs or buying short dated calls) exacerbates downside, creating a sell-off)

3. MMs from Citadel to Virtu absorb the flow by buying from retail.

4. MMs hedge + rebalance by offload to insitutions in block trades + dark pools. (harvesting selloff by institutions)

5. Institutions get low-visibility accumulation while keeping price down. (eg. 100k shares sold by retail, and 150k shares bought by institutions, while price drops.)

Retail sees "red days" and thinks "no one’s buying" while accumulation continues quietly.

Retail sentiment is collapsing but fundamentals have only improved (eg. new Israel data center build out for more ~80m+ ARR based on estimates).

It's a slow, strategic process to accumulate a large percentage of a company's float as hedge funds and institutions see Nebius as a potential next 100B+ company.

The fundamentals haven’t changed - only the share price and retail sentiment have.

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We been knew.

Others doubt. That’s ok

Either 102, 95, or 86.

Just remember. Arkady didn’t sell at 140 and he only has until January to sell.

Correction: 27 February

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See….. I get pissed everyday and consider selling when the stock goes down. Then you guys reiterate all of this and it makes me want to buy more.

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Lmfao I swear to god I was just thinking this exact thing. But to their point the manipulation works.