Nebius Valuation: Another AI Hype Train?
Nebius Group's Wild Ride: Strong Earnings, Plunging Stock – What Gives?
Okay, so Nebius Group (NBIS) drops its quarterly report, and it's supposedly a banger. $3 billion Meta contract? AI segment growth that's got Denis Buivolov, CFA (whoever that is) jacking up their fair value estimate to $147? Sounds like a party, right? Nebius: Valuation Update After Q3 Results -- Raising Price Target To $147 (NASDAQ:NBIS) - Seeking Alpha
The Market's Cold Shoulder
Wrong. The market apparently decided to throw a wet blanket on the whole damn thing. Shares are down 41% from their peak. Forty-freaking-one percent! What the hell?
Apparently, this is all about raised CapEx guidance and a 25 million share ATM program. Translation: they're gonna spend more money and dilute the stock. Smart move, guys. Real smart.
Buivolov (still don't know who that is, but okay), thinks NBIS is gonna see rapid revenue and capacity growth through 2028. He's got "key near-term catalysts" like analyst coverage (more of them?), new data center announcements (yawn), and the Dallas robotaxi launch (oh, joy, more robots). And he's got a beneficial long position in NBIS shares. Shocker.
Is This Time Different?
Look, I've seen this movie before. Company hypes its AI capabilities, Wall Street gets all hot and bothered, and then… poof. It's gone. We're left holding the bag while the insiders cash out. Are we seriously falling for this again?
And let's be real, "robust AI segment growth" could mean anything. Did they sell one extra chatbot to a dentist's office? Because that's not exactly going to power the next generation of, uh, whatever the hell they're promising.
They're raising CapEx. So what? That means they need more money. And where's that money coming from? Oh, right, by devaluing existing shares and selling them to the public via an at-the-market offering (ATM). So the existing shareholders get diluted. What a surprise. It's like getting a participation trophy that's also a bill.
And the Dallas robotaxi launch? Yeah, because what could possibly go wrong with self-driving cars in Texas? I'm sure that'll be smooth sailing.
Offcourse, maybe I'm just being cynical. Maybe Nebius Group really is the next big thing. Maybe AI will save us all from ourselves. Maybe pigs will fly.
Then again, maybe I need a drink.
The Great AI Hype Machine
Seriously, though, how much of this is just hype? We're all so desperate to believe in something—anything—that we're willing to ignore the obvious red flags. It's like everyone's got AI FOMO.
I mean, Coreweave is out there doing...something...Nvidia is printing money, and everyone wants a piece of the action. But how many of these companies are actually building something real, and how many are just riding the wave? And what about AMD or IREN? Are they even in the same game?
And this Meta contract… three billion dollars is a lot of money, no question. But what are they actually doing for Meta? Building more servers so people can argue about politics on Facebook? Is that really a good use of resources?
The Market's Got it Right (For Once)
So, what's the real story? The market was spooked, and I think it has every right to be. Nebius Group is asking us to trust them, even as they're diluting our shares and spending money like drunken sailors. It's a classic case of "heads we win, tails you lose." And I, for one, am not buying it.
Conclusion Title: Nebius: More Hype Than Hope?
Look, I ain't saying Nebius Group is a complete scam. But I am saying that investors should be very, very careful. This whole thing smells fishy, and until I see some real results, I'm staying far, far away.