r/stocks
NBIS has been getting a lot of attention lately what's the bear case?
Seeking bear case for NBIS: Is it a genuine AI infra play or just hype? Concerns include crowded market and valuation.
- Early-stage AI demand provides a long growth runway for infrastructure providers.
- Impressive recent growth numbers and expanding AI infrastructure offerings.
- Benefiting from rising global demand for AI compute capabilities.
- The AI infrastructure sector is becoming increasingly crowded with intense competition.
- Current valuations may already price in excessive optimism, leaving little margin for error.
- Risk that the stock is driven by retail hype rather than sustainable fundamental advantages.
Disclosure: No position in NBIS, currently researching it.
I've been digging into NBIS recently and I'm trying to figure out whether the market is seeing something I'm not, or if this is simply another stock benefiting from the AI hype cycle.
The company has been posting impressive growth numbers, expanding its AI infrastructure offerings, and attracting more attention from investors as demand for AI compute continues to rise. On the surface, the story looks compelling.
The bullish argument is that AI demand is still in the early stages, and companies providing the infrastructure behind it could have a much longer growth runway than many expect. The bearish argument is that AI infrastructure is becoming an increasingly crowded space. A lot of optimism is already priced into the sector, and sustaining this level of growth won't be easy as competition intensifies.
Another interesting aspect is that AI infrastructure stocks are no longer being discussed solely by traditional equity investors. As access to U.S. stocks becomes available through more platforms and ecosystems, companies like NBIS are being exposed to a much wider audience. I'm curious whether that broader participation will have a meaningful impact on valuations over the long term.
What I'm struggling to determine is whether NBIS has a genuine long term advantage that sets it apart, or whether investors are simply looking for the next AI related name to pile into.
For anyone following the company
What gives NBIS an edge over other AI infrastructure players?
What's the biggest risk that bulls tend to overlook?
Do you think current expectations are reasonable, or getting ahead of the fundamentals?
Curious to hear both sides of the argument.
....lately? NBIS has been heavily talked about for a year lol
he did say HE discovered it recently lol
Their free cash flow... Or lack thereof.
The bear case is the anti AI sentiment and data center opposition which is going to be a temporary news cycle. That said, they are based in Europe as well so I am not worried. All you need to know is that Situation Awareness made this their top holding to a point where they have 5% of the company.
I think the major risks would either be that the hardware becomes obsolete faster than expected due to ongoing developments in AI, requiring even more capital expenditure to remain competitive, or that margins will be squeezed due to strong competition (for example Mag 7 companies building their own data centers who can offer it cheaper/with a higher discount). The latter could also risk their revenue when Mag 7 companies no longer required Nebius' services. I'm still very bullish on Nebius though, as they have shown great execution and growth so far, and are building to become vertically integrated in AI by not only focussing on datacenters, but also on AI agents which can be used by smaller businesses using their services
the bear case is pretty obvious and if anyone sees it differently i'd like to hear it: Nebius has sold
basically all its compute for the foreseeable future at flat rates to Microsoft, meta et al which in turn provided the cash necessary for data center capex. This means that Nebius cannot really benefit from compute crunch, on the cost side though, prices for GPU and data centre infrastructure went though the roof.
Ultimately, this leads me to believe that profit margins will be very slim until at least 2029 after which data centre infrastructure is probably completely out of date and needs to be renewed.
I was invested into nebius very early but I currently cannot see a bull case for it.
Doesn't NBIS get hardware from Nvidia at preferential rates and with priority, as part of their partnership?
Eventually fundamentals always apply because fundamentals determine whether or not you stay in business.
In the short term anything goes and you can definitely roll the dice and have the chance to hit big but cashflow is the lifeblood of businesses.
I'll add more if it goes under $200. It's at minimum a $400-$500 stock with $1000+ range in the next five years. AI is here to stay, the annoying chatbots maybe not but people don't realize how useful it is for backend stuff and how early we are here. It's like looking at 3D graphics in the 90s and saying wow it will never look better than that.
Revenues isn't cashflow. Adjusted EBITDA isn't cashflow. Adjusted Net Income isn't cashflow. The cashflow statement doesn't lie.
What gives NBIS an edge over other AI infrastructure players?
Less exposure to cryptocurrency
What's the biggest risk that bulls tend to overlook?
It has a very high p/e ratio and a lot of debt. It's suspectable to market conditions.
Do you think current expectations are reasonable, or getting ahead of the fundamentals
It's going to reach $1000 by 2030.
Yeah I’m up 1000% on NBIS you definitely missed the boat bro
Not saying it can’t go up from here but proceed with caution
brother 😭 it’s been the hot topic the past 12 months. had a crazy run this year
Bear case is not a single yard of concrete has been poured in Birmingham or Independence, so just about zero capacity will come online in 2026 they simply cannot build fast enough if they are still grading dirt in June. They are also paying for 100 mw of power right now at the Independence site not being used but being added to OpEx. Vineland is handicapped running on generators and cannot be completed beyond the temporary capacity it has now until, and if, SOFCs get approved. Pennsylvania is grass we don't even know where it is so there's nothing moving there. Bethune no updates we have no clue if any capacity let alone 120mw will go live this year.
You have to hit the low guidance of $7B exit arr, that's going to require around 500mw active minimum billing at $14m/mw on a blackwell/rubin mix so they need another 300ish active. I assume they have around 220mw active as of Q1 ER, how? they exited 2025 with 170mw active and 220mw connected, the exit arr number was $1.25b or $7.35m/mw, then they exited Q1 2026 with $1.92 exit arr ($670m more) and I can only assume that was the remaining 50mw of the 220 "connected" but not active, billing at $13.4m/mw or slightly more if you account for the $11.6m/mw the Microsoft tranche is billed at for 50mw so maybe 5mw more at higher spot rates raising the $/mw figure who knows. Maybe the 310 mw Finland project is done this year giving them just what they need, or they string together a ton of high-cost colocation to tide them over but their current ebitda margins on the core ai business wouldn't be 45% if they were doing that, they did say it would drop in Q2 and get better so maybe that is the plan - temporary expensive colocation until one of their sites has active capacity available thus improving margins in Q3 on.
Still holding almost 11,000 shares though from $95 so don't get it twisted, but I definitely see why there's 45million+ shares sold short. Downvote away! I'm still up $2.45m on what I kept and what I sold, no mouse clicks will change that, I'm just telling you what I'm looking at.
How is this sketchy? Vendor financing has been business practice for decades.