I know some people will freak out because these are not value stocks. I know. But frankly r/stocks just tells you to buy an index and most everything else is just worthless junk. Apologies if posts about somewhat speculative growth stocks is annoying.
The way I'm looking at things. The "neoclouds" will have a ton of demand from hyperscalers, but also research institutions (academia, government, medical), financial institutions (hedge funds, large banks, prop trading firms), and maybe some other large companies that want to do something in-house with AI.
I think people forget that AI isn't just LLMs. AI is simply an extension of Machine Learning and the overall progression of classical computing. Will there be a lot of demand for highly advanced computing? Seems likely. And these neoclouds have some major advantages over renting compute on AWS/Azure/GCP. Cost, strategic neutrality (might not want to use GCP for your AI startup), GPU access, more consistent performance, etc.
When I'm looking at the bear cases, the only things I really see are that "AI is a dud", there's too many of these neoclouds popping up, or that they're using too much debt. Valuations seem reasonable, NBIS is guiding to around $8B in revenue for 2026 so they're only trading at \~3x sales, assuming that number materializes. So I'd like to hear anyone who has a bear case on Nebius in particular or the neocloud datacenter plays in general.
Of course, anything can happen. This is a nascent technology and an even more nascent industry. But it feels like this could be a huge opportunity for the 2-3 winners that emerge after the dust settles.