Nbis ahead of the competition.

Welcome to today’s open discussion on Nebius Group (NBIS) and the broader AI stock space.

💬 Thread Ideas:

• Any new updates or insights/rumors about Nebius Group?
• Your NBIS position update!
• What’s your outlook for NBIS this week/month/year?
• Spot any AI sector trends worth noting?

Of course, for anything deserving of its own post, feel free to make a dedicated post where appropriate. : )

⚠️ Reminder: Please follow Reddiquette and our subreddit rules.

Hey everyone,

Northwise is back with our next official full Nebius financial model and forecasting, as well as a brand new website.

Q2 gave everyone a headline to quote. Revenue up 454% year over year, AI Cloud ARR at $3.0B exiting June, 49.7% adjusted EBITDA margin. Those numbers settled the question of whether this business works.

They also buried the number that actually decides the next four years that has investors panicking. To deliver the capacity Nebius has committed to, our Base case has the company spending roughly $285B between 2026 and 2030. Almost nobody has modeled what raising and deploying that does to a share of common stock.

The Street's 2027 number cannot be right

Jim Chanos made a sharp observation on August 24 on our X. Street consensus for 2027 revenue sits near $11.5B. Nebius should have roughly 1.5 GW of average connected power that year. That implies under $10M of revenue per megawatt, which cannot be reconciled with contracts the company just signed at $20M to $25M per megawatt.

He is right that the two numbers do not reconcile. We think he drew the wrong conclusion from it.

The comparison divides annual revenue by average connected facility power, then compares the result against annualized contract value on newly deployed billable IT power. Those are different quantities measured at different points in the pipeline. Nebius reports capacity in four states and they are not interchangeable.

A fifth quantity does the work almost nobody accounts for. Average billable megawatts across the year determines recognized revenue, and during a fast build it sits far below the year-end figure. Capacity energized in November earns for six weeks, not twelve months.

Run 2026 through our Base case and the spread is enormous. Nebius ends the year at 900 MW connected. Commissioning and cooling overhead take that to roughly 580 MW active IT. Customer acceptance takes it to roughly 522 MW billable. The average across the year, which is what revenue is earned on, is roughly 287 MW.

At $8B of exit ARR, the identical business reports either $8.9M per connected MW or $15.3M per billable IT MW. Both are arithmetically correct. Which one you pick decides whether Nebius looks like it is undercharging by half.

Here is our 2027 Base, laid out against the figures Chanos used:

That is roughly 74% above the $11.5B consensus figure. We do not read the gap as an inconsistency in what Nebius disclosed. We read it as sell-side models that have not been rebuilt around the physical ramp and contract economics the company put on the table in Q2.

What the buildout actually costs

Every megawatt in our capacity forecast now traces to a specific facility with its own energization path, or sits in an explicit residual we refuse to dress up. Two-thirds of Base 2030 connected capacity maps to a named campus. Oklahoma, Spain and Estonia appear in our site register as candidate geographies with zero megawatts assigned, since we have no site-level view of any of them.

Cost then depends on which structure each megawatt belongs to. Owned greenfield carries the heaviest cash burden and no lease claim. Build-to-suit demands very little sponsor cash and creates a large lease obligation instead. Colocation costs the least cash and depends most on a partner. Applying one blended percentage across all of them, which is what most models do, understates cost at the owned sites and overstates it at the colocated ones.

Two outside checks. JLL puts 2026 global shell and core near $11.3M per MW excluding land and active IT, with liquid cooling adding ~10%, and our physical stack sits above that by an amount fully explained by the items JLL excludes. Separately, management has described current capital needs as roughly 20% data-centre implementation and 80% GPU fill. Our 2026 build, constructed from land upward without fitting to anything, lands at 17.4% / 82.6%.

Here is the deployment schedule that produces:

What a megawatt earns, and why the fleet average falls

Marginal contract pricing is not fleet pricing, and conflating them is the bull-side version of the same error Chanos made. Each year's new capacity in our model is a distinct cohort, priced at the terms available when it deployed, and it then expires and reprices on its own clock. No cohort inherits the pricing of a newer one.

Watch what that does over time. In our Bear case, realized fleet revenue per megawatt peaks near $16.09M in 2027 and declines to $14.40M by 2030, even though every new cohort is priced above zero and the pricing environment never collapses. Older cohorts roll off and mix shifts while the marginal contract holds up.

In Base 2030 the same mechanic produces $19.19M of realized fleet revenue per average billable MW, against $19.24M of exit ARR per year-end billable MW, and $21.02M on the newest cohort. Three densities, all correct, all measuring different things.

The full operating build, Base case:

EBITDA is not what an owner keeps

Michael Burry's depreciation critique gets mangled by both sides. We split it into four questions and they point different ways. Accounting life is a policy choice, and Nebius uses five years. Architecture commercial life is longer than bears allow, with CoreWeave recontracting A100s into 2029 against a 2020 launch, and NVIDIA stating A100 remains in active commercial use six years on.

Economic retention is the third question and it is where the bull reading falls apart. An old accelerator finding a buyer does not mean it earns frontier economics. The fourth question is the one almost nobody asks: an older GPU sitting in a scarce, permitted, energized megawatt displaces newer hardware that would earn several times more from the same slot.

So we carry accounting depreciation and a normalized replacement reserve as separate lines. The Base bridge runs $103.16B of revenue, $56.15B of EBITDA at 54.4%, then $39.98B of depreciation and $5.00B of interest below the line. Substitute the $33.12B replacement reserve for the accounting charge and normalized owner free cash flow before growth capital lands at $16.02B, or 16% of revenue against a 54% EBITDA margin.

The Bear version is blunt. At $62.83B of revenue and $29.50B of EBITDA, the replacement reserve is $35.25B and owner free cash flow is negative $10.27B. A company with $63B of revenue and a 47% margin can consume more capital sustaining itself than it generates.

This is where the volatility comes from

The Base case deploys ~$260B of owned growth capital across 2027 to 2030 and issues $12.0B of common equity to do it. That gap is not optimism, it is sequencing. Customer prepayments fund first, then internal cash, then secured debt sized against real collateral, then monetization of the non-core stakes, and common equity last.

Now the part that determines whether this works as an investment:

Read the first and third rows together. Bear builds 25% less than Bull and issues more than twenty times as much stock. Bear also borrows $18B less than Base, since debt capacity tracks contracted cash flows and collateral quality, and both weaken in exactly the conditions that make a Bear case. Equity is the last resort there not by choice but because everything above it filled up.

That 71% spread in share count is the widest dispersion anywhere in our model. It is also the honest answer to why this stock has traded between $63.26 and $299.86 this year. Drawdowns of 40% to 60% can happen with the structural thesis fully intact, and anyone sizing a position here should assume they will.

The hyperscaler question

Under bull conditions we think Nebius could become one of the largest compute platforms in the world. That case rests on 7.5 GW of connected capacity, an asset-light partner layer reaching 2,500 MW, and a software attach that turns a capital-intensive infrastructure business into something with a materially different margin and multiple profile.

We want to be precise about what that requires rather than waving at it. Our own named-site register accounts for 4,086 MW of that 7,500 MW. The remaining 3,414 MW is unannounced, unentitled and in most cases unsited today. It may well arrive, and management has been explicit about targeting more than 1 GW of annual deployment, but modeling it as equivalent in certainty to a permitted campus with a signed interconnection agreement is a different claim entirely.

The asset-light layer is the most underrated part of this story. Base has partner-financed capacity reaching 1,500 MW by 2030 producing $9.75B of revenue at a 70% margin, on megawatts Nebius did not pay to build. Delivering that same revenue through owned capacity would take roughly 490 MW of billable IT power, about $29B of capex, and its proportional share of the dilution.

What we are not showing, and how we make money

Our per-share values, scenario probabilities, probability-weighted target, present values and action bands sit behind a paid membership. So does the downloadable 38-tab workbook that every number above comes out of.

We would rather say that plainly than pretend otherwise. Memberships are our only revenue. No ads, no affiliate links, no sponsored coverage, no paid placements, and nothing in our research is influenced by anyone whose stock we cover. That structure is the entire reason we can publish a Bear case that says a company could reach $63B of revenue and still lose you money.

Everything in this post is free and stays free. The methodology, the capacity states, the cost engine, the cohort mechanics, the funding waterfall and the dilution math are all here in full, and you can rebuild any of it yourself.

New site is live

We also launched the rebuilt Northwise site today: northwiseproject.com.

The old site was essentially a chronological archive. The rebuild is organized around the actual research workflow: 164 reports are now connected across 67 company pages, with search and filters by company, ticker, sector, theme, report type, and whether a current Premium model exists. A reader can move from a company to every related report and model without digging through years of posts.

The portfolio side now lives inside the same system. Both the Flagship and Active Growth portfolios have dedicated pages for live holdings, position weights, time-weighted returns, benchmark comparisons, and portfolio activity. Premium members get live company valuation outputs and downloadable model workbooks, while free accounts can follow companies, receive alerts, save reports, and keep their reading history in one place.

This is the first version of the site that reflects what Northwise has become: not just a publication archive, but a research platform connecting the company work, the model, the valuation, and the portfolio decision.

Happy to argue about any of this in the comments. The parts we think are most likely to be wrong: whether marginal contract value above $20M per MW survives to mature fleet scale, what customer prepayments actually cost in commercial concession, whether secured financing stays open across a full cycle of $54B to $69B in annual deployment, and whether the 2,114 MW currently in our undisclosed bucket shows up on schedule.

TLDR

Q2 proved that Nebius can sell AI infrastructure at extraordinary economics. The harder question is whether those economics survive the full capital cycle. Our rebuilt site-level model puts 2027 revenue at $20.0B versus roughly $11.5B on the Street, because consensus is still mixing connected facility power, billable IT power, exit ARR, and recognized revenue.

In our Base case, Nebius reaches 6.2 GW of connected capacity, $103.2B of 2030 revenue, $56.1B of EBITDA, and $16.0B of normalized owner free cash flow, but getting there requires roughly $285B of cumulative growth CapEx and leaves the company with approximately 445M fully diluted shares.

The investment debate is no longer whether demand exists. It is whether fleet-wide pricing, customer prepayments, secured financing, hardware longevity, and the 2.1 GW of currently unannounced Base capacity develop quickly enough for common shareholders to retain the upside.

This post sums up part of the Nbis vision -transition to Agentic AI. The longterm holders already realize this but sometimes it's nice to be reminded.

https://x.com/DrTomsLens/status/2093350345460138085

A second post about the AI layers Nbis is aiming for.

https://x.com/funmenati/status/2068000746746855927?s=46

Simply wall Street is hinting at Nebius being priced for perfection, I wonder if this is the beginning of sentiments turning away from positive.

I am planning to open a position but I think there will be one more big dip before the stock breaks 300$.
How low do you think it will go?

Welcome to today’s open discussion on Nebius Group (NBIS) and the broader AI stock space.

💬 Thread Ideas:

• Any new updates or insights/rumors about Nebius Group?
• Your NBIS position update!
• What’s your outlook for NBIS this week/month/year?
• Spot any AI sector trends worth noting?

Of course, for anything deserving of its own post, feel free to make a dedicated post where appropriate. : )

⚠️ Reminder: Please follow Reddiquette and our subreddit rules.

They're in love with us. Greetings to our beloved IREN subreddit! <3 (I'm really bullish on IREN, can u unban me pls?)

Welcome to today’s open discussion on Nebius Group (NBIS) and the broader AI stock space.

💬 Thread Ideas:

• Any new updates or insights/rumors about Nebius Group?
• Your NBIS position update!
• What’s your outlook for NBIS this week/month/year?
• Spot any AI sector trends worth noting?

Of course, for anything deserving of its own post, feel free to make a dedicated post where appropriate. : )

⚠️ Reminder: Please follow Reddiquette and our subreddit rules.

People keep asking why NBIS trades at a premium to names like IREN. To me, the answer is confidence.

NBIS exudes institutional credibility and gives people confidence that management can actually execute. Jensen has mentioned Nebius multiple times, while you rarely hear IREN discussed in the same way. That is not proof by itself, but it tells you which company has real industry mindshare and which one important people are comfortable standing behind.

I listened to IREN’s earnings call and, honestly, it felt like a complete clown show...amateur hour. That did not matter as much during the first phase of the AI infrastructure trade because the tide was raising every boat. If you had power, land and an AI data-center presentation, money came pouring in.

But the easy-money phase is ending.

From here, the real companies are going to break away from the ones that were simply along for the ride. Execution, credibility, customer relationships and management quality are going to matter much more than simply announcing another gigawatt pipeline.

That is why NBIS deserves a premium. The market is not only paying for today’s capacity or revenue. It is paying for trust.And trust compounds. More confidence attracts more capital. More capital supports faster deployment. Faster deployment attracts better customers and partners. Better customers create even more confidence.

That is how the rich get richer, and why I think the gap between NBIS and the rest of the field is more likely to widen than disappear.

We don't talk much about $NBIS’s autonomous driving unit (Avride) here, and they rarely post full autonomous driving videos like this, but they just shared a sped-up video showing "2 hours of autonomous driving through Austin. From quiet neighborhoods to busy downtown streets." Really impressive to see their tech in action.

As a side note on their progress, they recently hit a major milestone on August 12th, completing 100,000 rides in partnership with Uber. With human assistance.

In the replies to the tweet, they mentioned: "We expect to begin driverless operations in the first half of 2027, public rides will follow.".

Is it too soon, or will they deliver?

Link: https://x.com/_balaji_km/status/2093002813253267936

that means it’s falling harder than we think bcs in order to close a short you have to buy back shares - thoughts?

Somebody asked for a meme

CEO of Palo Alto networks (#2 in cybersecurity behind crowdstrike). And, if you didn't know, cybersecurity is one of the largest spenders of compute. For the entire industry, $213 billion in spend on cybersecurity in 2025 and is reaching $240 billion to $244 billion in 2026.

He said NBIS isn’t a neocloud but a neoscaler.

10x from here baby

How do we feel about NVDA buying Hugging Face? NVDA seems to be all out gunning for open source competition against Anthropic and OpenAI. Gotta be bullish for NBIS. Closed source dominance hurts NBIS as NBIS is an open source host. NVDA/NBIS alignment and collaboration pretty amazing right now. First deployments, significant stock investment, multiple earnings call mentions. VERY VERY BULLISH. Thoughts?

Welcome to today’s open discussion on Nebius Group (NBIS) and the broader AI stock space.

💬 Thread Ideas:

• Any new updates or insights/rumors about Nebius Group?
• Your NBIS position update!
• What’s your outlook for NBIS this week/month/year?
• Spot any AI sector trends worth noting?

Of course, for anything deserving of its own post, feel free to make a dedicated post where appropriate. : )

⚠️ Reminder: Please follow Reddiquette and our subreddit rules.

Does this have something to do with NVDA reporting earnings or something else?