Nebius Stock Is Actually Cheap (Archive, Full Access)
Nebius signs billion-dollar AI-cloud deals with premium pricing and heavy customer prepayments.
This 5-Minute Pitch was originally published on Seeking Alpha. It is shared here to showcase my work and track record. I also publish full 5-Minute Pitches on this site. This will be behind a paywall, accessible to Hunter Tier members.
Elevator Pitch
- NBIS is signing multiyear AI-cloud contracts exceeding $1 billion on average, supported by strong demand for GPU capacity and attractive contract economics.
- Customer prepayments cover 50% to 60% of associated capacity capex, improving cash conversion and reducing capital payback periods.
- Nebius charges $7.15 per hour for B200 capacity, above the broader market benchmark, while short-duration capacity can earn materially higher revenue per megawatt of capacity.
- Remaining performance obligations reached $37.5B, with $13.5B expected to convert into revenue within 2 years, and management is targeting $8B of year-end ARR.
- NBIS trades above peers on forward revenue multiples, but its implied long-term revenue growth requirement remains well below the expected revenue projections.
Read the full article here.
