NBIS is best in class: Microsoft/Meta contracts now allow higher-priced megawatt leasing and improving margins; revenue should grow from $1.3 billion to over $3.3 billion this fiscal year and nearly $12.2 billion next. It looks extremely expensive on barely any revenue, but overspending concerns are exaggerated.

But I still consider it a high-quality company. It's a name I've been following for a long time. I own shares in it, and it is the company " Nebius". I know what people will say, "Oh, it's high risk."

Isn't that so? Because it is in the field of the new cloud (neo cloud). Although Nebius itself does not see itself as a new cloud company . Rather, they see it as an artificial intelligence cloud or a next-generation ultra-large-scale computing company.

So, of course, since Nebius is in the exact same sector, it too has been hurt by concerns about overspending on artificial intelligence and what the return on investment is. Secondly, all of these companies still need to grow significantly, but they have already borrowed a lot of debt, although CoreWave's debt is much larger than Nebius'.

In my opinion, Nebeus is still the best in its class at what it does.

For those who do n't know, the engineering and management team at Nebius is the same one that was previously in charge of Yandex, which was known as the Google of Russia before its exit, and they founded this company two years ago and are based in Amsterdam.

Therefore, they have a huge presence in Europe, which in my opinion is a very big advantage for them. But they also have a large exposure in the United States and the Middle East, and I think there are rumors that they will grow even more in Asia.

But Nebius, at the moment, looks extremely expensive on paper. Why is this company valued at nearly $50 billion , while it barely generates any revenue at present, which is true?

They will rise from revenues of $1.3 billion in the past twelve months to more than $3.3 billion by the end of this fiscal year, and then to nearly $12.2 billion in the next fiscal year, although I think that number could be much higher , all the way to more than $23 billion in fiscal year 2028.

Nebius did something very smart, something that many of their competitors did not do, which was to sign big contracts with Microsoft and Meta.

These contracts typically have a very low profit margin, but they allowed them to move faster and raise capital at a price that was, let's say, cheaper. This also means they are ready for what is coming now.

They can lease megawatts at a higher price, which also means they don't have to sell their entire capacity.

Prices are constantly increasing. If some companies want to get an allocation for only 3 months, well, we will charge them a little more, which means that our profit margin profile suddenly improves dramatically, which of course helps the company to build faster and not need to raise more capital, especially in the current interest rate environment.

So , here we are looking at a company that, in my opinion, is the best in its class and continues to grow very rapidly . You will see that the company's profit margin actually improves over time.

The concerns here are generally a bit exaggerated, but I understand them. I understand those concerns at the moment because we are talking about very large numbers and high growth rates for companies that are, let's say, still in their early stages.