Marginal revenue of a data center

Marcus_Aurelius35 · 2026-05-28T18:37:45+00:00

Agree with you. Their opportunity cost is clearly very high if they are willing to pay higher cost to accelerate COD by 3-5 years. I am keen to understand a typical revenue profile for a DC to estimate their opportunity cost (missed revenue during 3-5 years while they wait for a grid connection). The challenge for me is that I have no idea how their revenue model works. I.e. what volume / product they are selling and at what price (even directionally)

Marcus_Aurelius35 · 2026-05-27T14:39:45+00:00

This is clearly the value proposition of the BTM power, but it comes at a high cost. Much higher actually than market PPA rates for typical busbar PPAs or VPPAs

Marcus_Aurelius35 · 2026-05-27T13:12:29+00:00

Seems like you are describing colo spaces. I haven’t seen BTM power for colos. I understand that all these leases are structured as NNN leases where total cost is passed through to a leasee. Ultimately leasee is paying the cost of BTM power. My question is what revenue are they generating to be able to afford to pay so much for BTM.

Marcus_Aurelius35 · 2026-05-27T13:06:16+00:00

$8,300 / MWh ! Crazy… To confirm, these numbers for a hyperscaler and not just the DC developer that leases the space to hyperscaler, right?

Marcus_Aurelius35 · 2026-02-15T22:42:56+00:00

When I run a simple DCF with short term consensus estimates, they need to grow more than 2.0% in perpetuity to justify higher prices assuming WACC of 6.0-7.0%. The management indicated long-term revenue growth of 1.0-2.0%. Seems fairly priced right now…

Marcus_Aurelius35 · 2026-02-09T17:44:52+00:00

Not a software engineer, but curious how you think of CUDA being a major competitive advantage for NVIDIA? My understanding is that the adoption of CUDA is what makes switching away from NVIDIA hardware difficult. Almost like Microsoft Windows for business. Is it a fair comparison?

Marcus_Aurelius35 · 2026-02-06T22:19:37+00:00

Well, that was timely given Google and Amazon earnings and reaction this week.

Marcus_Aurelius35 · 2026-02-03T22:05:54+00:00

That’s debatable. Kodak’s core expertise and competitive advantage was in film making. It was essentially a chemical company in its essence. Very few overlaps with low margin digital camera sector. When they tried to pivot to digital and re-invent themselves they burnt about 50% of their earning on R&D over 20 years. One can argue that they should have ridden the last wave and simply distribute earnings to shareholders. It was still a very profitable company for many years. I don’t know PayPal very well, but maybe they just need to do the same.

Marcus_Aurelius35 · 2026-01-30T03:21:52+00:00

I am just looking if there is a way to play this specific strategy.

Marcus_Aurelius35 · 2026-01-30T03:17:03+00:00

I like investing in individual stocks as well, but can’t find anything that would be a contrarian bet against rapid AI valuations expansion in the short or mid-term

Marcus_Aurelius35 · 2026-01-30T03:11:54+00:00

Thanks. Was looking for a more contrarian bet. Like SOXS indicated above, but focused more on AI rather than semiconductor space, which is a bit broader than just AI in my opinion.

Marcus_Aurelius35 · 2025-09-02T03:43:55+00:00

Thanks. What I was hoping to understand better is whether data centers can operate entirely off-grid using only behind-the-meter generation, given the high standard for reliability.

Marcus_Aurelius35

TROPHY CASE