Nebius Group N.V. (NBIS) was formerly known as Yandex N.V.
Nebius has a crown-jewel data center in Europe that has been repurposed to serve as an AI Inferencing-as-a-Service company.
This morning, Nebius announced an oversubscribed $750M financing deal led by NVIDIA, Accel and Orbis Investments that puts it on the map for new institutional investors who are on the lookout for the NEXT power play needed to help build out AI Infrastructure in the coming years.
As CEO, Arkady Volozh, put it:
“The foundation of our business is our expertise in building advanced technology infrastructure. We have demonstrated the scale of our ambitions, initiating an AI Infrastructure build-out across two continents.
This strategic financing gives us additional firepower to do it faster and on a larger scale. I’m grateful to our investors for the trust they have placed in us – our team is ready to deliver.”
There are three important aspects to this financing deal:
We think NBIS will now trade for a much higher valuation. Currently, Coreweave is valued at 10x 2024 revenues and is talking about IPO'ing in Q2’25 at a 15x 2024 run rate. We think NBIS will also trade for 10x ARR run rate.
Assuming there are 235M shares outstanding after this deal (we had 200M Class A & B combined before this deal), a 10x $900M ARR run rate gets us to a $39 stock in 2-4 quarters.
We are therefore buying in aggressively this morning and adding on any flushes.
This deal is with long-term investors. Once it cleans up, we expect it to run to $30 quickly and high-$30’s in the following 2-4 quarters.
Stop Loss: We are using a Time Stop as we allow our thesis to play out, as we see a lot of value in NBIS in the mid-$20s.
We have a 10 conviction rating on NBIS.
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Disclosure: We are long NBIS stock. We may change our positioning at a moment’s notice, without notifying you of any such moves.
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