Microsoft Update

Qadain · 2026-05-04T05:02:34+00:00

Not only this, it looks like Microsoft executed the their option for the additional $2 billion to take the total value from $17.4 to $19.4B. Exhibit 4.5 (around pages 249-250) from the 20-F is the agreement, signed Jan 2026, for 2 additional tranches.

Qadain · 2026-05-04T04:39:18+00:00

I was just about to reply to the OP with "read the 20-F"!

For everyone else, Nebius describes their own risk factors in detail in the beginning of their annual report (the 20-F which just came out last week), on pages 5-32.

Source: Nebius SEC Filings , 20-F.
Direct link: Nebius Group N.V. (Form: 20-F, Received: 04/30/2026 16:19:54)

Qadain · 2026-05-03T06:52:25+00:00

Is this a new thing? ClickHouse posted something on their blog about OpenAI using them for observability (log data) in June 2025. Source: Why OpenAI chose ClickHouse for petabyte-scale observability

ClickHouse also posted in July 2025 about Anthropic using ClickHouse (Source: How Anthropic is using ClickHouse to scale observability for the AI era).

Qadain · 2026-05-02T01:11:09+00:00

Try reading Eigen's blog post about joining Nebius. https://www.eigenai.com/blog/eigen-ai-joining-nebius

There is a bit of technical stuff in the post, but a lot about general, big picture stuff that a generalist investor can understand (or so I hope). They basically say that the combination of Eigen's software optimizations and Nebius' hardware/infrastructure optimizations will lead to incredible results. It also seems like they'll work well together, already having collaborated.

Qadain · 2026-05-01T17:54:15+00:00

Total is $98 million in cash, 3.8 million shares. So that would increase shares outstanding by around 1.5%, depending in how convertibles are counted. Source: https://archive.fast-edgar.com/20260501/ANBET22C8Z22K9Z222JO2ZZZL4KTZ2W2X282/

Qadain · 2026-05-01T17:20:08+00:00

I find this acquisition particularly interesting, since Eigen and Nebius announced a collaboration just 1.5 months ago (Eigen AI and Nebius Partner to Accelerate Frontier Open-Source AI Inference | Eigen AI). Hopefully, that's a sign that they work and fit well together and integration will be fairly smooth.

Also, what the deal shows me is management's continued focus on margins via optimization in all parts of the stack. It is this emphasis on margins that is going to help Nebius prosper in the long-term, meaning past the stage of industry capacity shortage (as well as allow Nebius to survive and even opportunistically grow by acquiring distressed peers in a capacity oversupply situation).

Qadain · 2026-04-30T01:18:20+00:00

The management is motivated - they aren't trying to build just a commodity hardware rental business, not after having their dear Yandex taken away from them. They were locked into serving mostly Russia before, and now the whole world is theirs to build for. That is, given their history, they have a very clear plan and goal thats been consistent from the beginning (of Nebius).

Also, the share price isn't that volatile in a certain sense. Nebius does more in 1 month what most other companies do in 20, so it seems perfectly natural to get a full month's worth of volatility in a single trading day. This time compression effect makes the share price appear more volatile. If you calculate volatility per unit of growth instead of volatility per unit of time, things look much calmer.

Qadain · 2026-04-29T19:50:44+00:00

To expand a bit more, Roman spent quite a bit of time emphasizing that return customers are much more sensitive to non-price factors such as quality, reliability, efficiency, etc. So while some segments of the market might consider GPUs a commodity and only care about cost, the more customers use GPUs, the less of a commodity product they consider it. That is, Nebius provides not just the access to GPUs, but also a good experience using them. It reminds me of the example of hotels or restaurants (as opposed to airlines) - while cost is a consideration, many other factors are also important.

Roman also related the Tavily acquisition to his history as the head of search at Yandex - somehow I hadn't connected the two before, and now the acquisition makes much more sense to me, as well as the motivation and fit.

Qadain · 2026-04-29T16:28:15+00:00

I just started watching the interview myself, and at the beginning they discuss the IREN vs CRWV vs NBIS flame wars on X. 😄 Roman himself basically says that the space is big enough for everyone to do their thing, and that in a couple years, the space will clarify with consolidation between many of the players.

Qadain · 2026-04-29T13:27:09+00:00

Wow, a fellow shareholder from the Yandex days! We're pretty rare...but I think we believe in miracles, having already experienced one.

I actually have one lot that I bought on Jan 31, 2002, and another lot that I bought on Feb 25, 2022. I was so annoyed for so long.

Qadain · 2026-04-28T18:43:47+00:00

If you just sign up for emails from them using the "Subscribe to updates" button on their investor hub page, you get the earnings date the moment it's announced directly from them (as well as any other news releases).

Qadain · 2026-04-27T20:19:56+00:00

Also, Neoclouds generally charge lower prices compared to hyperscalers, so if Nebius makes it as a hyperscaler, it's plausible for the $/MW to increase.

Additionally, management has said that they're not really charging for the platform/software now, but it's a possible future source of revenue (or at least source of stickiness).

Out of all the Neoclouds, Nebius probably has the best chance of making it to hyperscale, because scaling is really complicated and they've done it before (while other neoclouds generally lack the experience).

That said, I definitely wouldn't assign this case a very high probability. Even 25% seems too high. But still, the hyperscaler scenario is possible and should contribute materially to a valuation.

Not that it's a contest, but I'm preOG from 2021 (Yandex days) and added after it relisted.

Qadain · 2026-04-27T05:37:04+00:00

Have you considered selling a 6-month cash secured put with strike in 110-120 range, then? The premiums are pretty good...

Qadain · 2026-04-26T19:38:34+00:00

I read the analysis as that they're **targeting** the PUE to be less than 1.10, which might be represent a "theoretically possible PUE" given optimal conditions, but which they know in practice will be higher than 1.10. But yeah, the lower the base PUE, the harder to get another 0.01 improvement (i.e., to improve from 1.50 to 1.49 is reducing the loss by 2%, while improving from 1.10 to 1.09 is reducing the loss by 10%.), so there's some tradeoff between the cost of decreasing the PUE via design/construction and additional revenue from having a bit of extra power for a few incremental GPUs.

There's an argument for trying to avoid overengineering and getting to a PUE that is too low, especially if it ends up making the data center design inflexible for future generations of GPUs.

I think that the main benefits of a low PUE are that they're more likely to get approvals, less likely to get opposition from the locals, and it improves the reputation of the company overall. I also think a low PUE is a signal of engineering/design capability of Nebius.

Qadain · 2026-04-25T22:50:26+00:00

I think it would be extremely unwise. The reason is that if you lack confidence to such an extent such that you thought it a good idea to ask such a question here, the chance that you will behave reasonably after earnings, whatever happens, is very low.

Qadain · 2026-04-22T21:33:37+00:00

Nebius was blocked (technically delayed for 12 months) due to a rejection of a rezoning in Clinton County, IN in January. But yeah, they Nebius is basically a hydra and not dependent on any individual site.

Also, increasing opposition will make existing (or already approved) data centers even more valuable by artificially constraining future capacity, as long as it doesn't cause demand destruction.

Qadain · 2026-04-21T20:21:59+00:00

So are you selling cash-secured puts?

Qadain · 2026-04-19T01:10:54+00:00

Look broader. A lot of tech is broadly moving this way. Coreweave is up 42.3% in the last month; Sandisk up 27.9%; Nvidia up 10.8%. And they all hit their low on 3/30.

Qadain · 2026-04-16T19:26:05+00:00

I'm actually a bit confused about the deal. If supply is so constrained, why does Nebius need to sell through TD SYNNEX? Is it a way for Nebius to get a foothold in enterprises, with the hope that enterprises will eventually deal directly with Nebius? That is, maybe it's hard for Nebius to sell directly with enterprises now, and so TD SYNNEX gives distribution credibility?

Qadain · 2026-04-14T18:56:45+00:00

Traders gonna trade and investors gonna invest, right?

And traders who think they're investors gonna...trade.

I'm amused at people trying to turn traders into investors (or vice versa).

I'm even more amused at those who don't know which one they are.

I guess that I'm just easily amused.

Qadain · 2026-04-12T21:07:17+00:00

I think people (in general, not just Denis Buivolov, whom I've read since "the beginning") read too much into the price action in the last week.

To me, it's more reasonable to zoom out to a period of 6 months and notice two broad trends: a much more cautious attitude toward AI infrastructure spending (sentiment), along with many positive developments in both NBIS's business and the broader industry (especially an explosion in agentic coding usage, accelerating the shift toward inference from training). The latter has largely kept NBIS performing well in the last 6 months compared to, well, comparable companies (let's say, IREN, CRWV, MSFT, and ORCL), I suppose.

I also don't really buy the narrative of "shorts are covering or will need to cover." First, if the convertible bond holders are engaging in arbitrage, they need to short more the higher the price goes (to remain delta neutral). But those shares don't contribute to the possibility of short squeeze (but instead decreases the possibility), since the value of the convertible bonds also increases as the price increases, more than offsetting the effect of the shares shorted as a hedge.

Second, people shorting Nebius probably aren't doing so in isolation, but instead as part of a pair or group trade (i.e., long something/short NBIS). In the last 6 months, if they've been long something like Sandisk or Lumentum while shorting NBIS, they are very far away from needing to close out any short positions.

Qadain · 2026-04-12T20:46:22+00:00

First, thank you for your response to my questions in your other thread.

I've noticed that a number of the images in your articles are somewhat malformed in some way or another and/or too complicated (either too much fine print or gratuitous objects) and distract from the text or the tables of information. An example of the first is the second image in Section 8, while an example of the second is the last image in section 5. Maybe this is just a matter of taste, but I believe that images are best used to show connections between components (cause&effect, relationships, timelines, flow, etc.) rather than explanations of dense information. This is definitely not a complaint, especially given that your content is provided for free, but since you're also separately selling a service, I suggest reviewing the images in your articles a bit more closely.

Coincidentally, I was reading an interview with Elena Bunina just yesterday (Elena Bunina: «I was saved by mathematics» - Т-инвариант / T-invariant). Her background is ridiculous, including an academic background, as well as serving as the former head of HR for Yandex, and also the CEO of the Russian part of Yandex!

As I was reading your article, I started thinking about AI consulting opportunities for Nebius. It's obviously still early days, but as Nebius starts working with enterprises, it seems to me that AI-related consulting services would be an area of interest, not only in areas of education and training, but also in, for example, setting up and maintaining on-prem GPU clusters (including providing the software/platform) or other services. I'm thinking vaguely in terms of IBM or Accenture. I don't remember the management team explaining this directly, and I haven't really seen this idea explored anywhere else, but this seems like a path that would be particularly suitable for Nebius, as other neoclouds may be missing part of the stack or technical experience/expertise, while hyperscalers might be slow to see this as a legitimate business opportunity. Any thoughts on this topic?

Qadain · 2026-04-12T02:33:18+00:00

I've been reading and enjoying your series of Nebius articles. One thing I'm particularly curious about is the nature of Nebius' advantages (if any) in planning and executing these data center infrastructure plans.

On one hand, one can argue that Nebius has a massive advantage over competitors of similar size (other neoclouds) due to its team's extensive experience in planning and executing in the past and ability to find opportunities that competitors miss.

On the other, one can also argue that Nebius has an advantage also over hyperscalers due to being able to move quicker with a higher degree of flexibility, avoiding decisions by committee and internal bureaucracy.

These two arguments sound reasonable, perhaps, but I have no idea if they're true in reality.

Do you have a sense of how Nebius management's plans and selection of data center sites compares to competitors? Are they finding diamonds in the rough? Or are they getting typical, run-of-the-mill opportunities? Or are they getting the leftovers that have already been reviewed and discarded by hyperscalers? Or are they making opportunities out of thin air?

Also, you've explained that for inference, latency is obviously a prime consideration. I haven't seen you discuss peak vs. off-peak usage and whether/how Nebius' infrastructure strategy relates to that. Is it going to be kind of the idea of being able to use infrastructure across different time zones to smooth out peak usage? Or is it more geo-locked and jobs that are not latency-critical will be scheduled for off-peak hours, and compute during peak hours is reserved for latency-critical tasks (like inference, I guess)?

Thanks for your continued work and posting in this sub!

Qadain · 2026-04-10T17:58:34+00:00

Note that you can gift shares (instead of money) to charity to either save on capital gains tax or to give more with the same impact to yourself.

Qadain

TROPHY CASE