Alright, let's get real. Nebius Group's stock is up 346% this year? Give me a freakin' break. In this market, that kinda jump screams "bubble" louder than a toddler with a kazoo. The question isn't whether they're doing something right, it's whether that "something" is sustainable, or just the result of some seriously over-caffeinated day traders.
The Microsoft Money Train
Okay, so Microsoft threw $17.4 billion at them. SEVENTEEN. POINT. FOUR. BILLION. That'll juice any stock, let's be real. It's like giving a shot of adrenaline to a corpse. Nebius provides AI infrastructure, which, let's face it, is the new gold rush. Everyone and their grandma is trying to get a piece of that AI pie.
But here's the thing: Microsoft doesn't just throw money around for shits and giggles. They see something. Or...do they? Maybe they're just trying to corner the market and squash any potential competitors. That's what Microsoft does, after all. It's their whole MO. The deal is for five years, so Nebius is set for a while, offcourse. But what happens after those five years? Do they have a plan B, or are they just gonna ride the Microsoft wave until it crashes on the shore?
And what about their competition? CoreWeave and Oracle are also playing in this space. Iren too, apparently, though I've barely heard of them. Are they just gonna sit back and watch Nebius rake in the dough, or are they gonna come out swinging? This ain't a friendly game of tiddlywinks, people.
Show Me the Money (and the GPUs)
Nebius had $1.7 billion in cash at the end of Q2. Solid, sure. But $17.4 billion from Microsoft dwarfs that. They're aiming for a $1 billion ARR run rate by December. Which, let's be honest, they've probably blown past already thanks to that Microsoft deal.
But here's where my cynicism really kicks in: They "procure" GPUs from Nvidia. That's code for "we're completely dependent on one company for the core of our business." What happens when Nvidia decides to raise prices? Or, even worse, what happens when Nvidia decides they want to get into the AI infrastructure game themselves? Nebius is screwed, that's what. They'd be like a house of cards in a hurricane.
They've got data centers in Kansas City, New Jersey, Iceland, France, Finland, and Israel. Seems legit. But is it enough? Are they expanding fast enough to keep up with demand? Are those locations strategically chosen, or did they just pick them out of a hat?
Investors are all hot and bothered about the Microsoft partnership, potential new hyperscaler clients (AWS, Google Cloud), and the balance sheet. They're calling Nebius a "market-beating technology company." Oh, please. They're riding a wave, and everyone's acting like they invented surfing. Let's see if they can still stand up when the tide goes out.
The Earnings Report: Judgment Day
November 11th is the big day. That's when Nebius reports its Q3 earnings. That's when we'll see if this whole thing is built on solid ground, or just a house of cards waiting to collapse. Will they finally give some real details about the Microsoft deal? Will they announce any new partnerships? Will they even address the Nvidia dependency issue? Should You Buy Nebius Stock Before Nov. 11? - Yahoo Finance
Then again, maybe I'm just being a grumpy old cynic. Maybe Nebius really is the next big thing. Maybe they'll revolutionize AI infrastructure and make us all rich. But I doubt it. I really doubt it.
