From 24/7 Wall St. · Alex Sirois · · 1m 30s
The One Neocloud I Keep Buying Again
Nebius Group's secret: repeat buys despite GAAP loss and high debt.
In brief
Nebius Group's secret: repeat buys despite GAAP loss and high debt. Nebius Group keeps investors buying despite GAAP operating loss and $8.5 billion convertible debt by leveraging a $37.5 billion backlog and anchor customers in AI model training. Originally reported by 24/7 Wall St..
Why I Keep Hitting Buy
I compound into Nebius Group because its contracted backlog dwarfs current revenue and anchor customers train frontier AI models.
“I am compounding into a business whose contracted backlog dwarfs its current revenue, whose anchor customers are the same names training the frontier models, and whose CEO keeps repeating that he could sell out next year’s capacity today and is choosing to wait for better terms.”
Nebius' Full-Stack AI Cloud
Nebius runs a full-stack AI cloud owning data centers and building proprietary software stacks including Nebius AI Cloud and Tavily.
“Nebius runs a full-stack AI cloud. It owns data centers, builds its own software stack (Nebius AI Cloud, Token Factory, Aether, and the acquired Tavily and ClarifAI assets), and sits inside NVIDIA’s inner circle as an Exemplar Cloud partner on GB300 NVL72.”
Three Numbers That Keep the Thesis Alive
Q2 2026 revenue reached $582.3 million, up 454.04% YoY, with AI Cloud segment at $574.9 million.
“Q2 2026 revenue reached $582.3 million, up 454.04% year over year, ahead of the $574.65 million consensus.”
Visibility and Funding
Remaining performance obligations sit at $37.5 billion, with $8.04 billion cash and $2.3 billion operating cash flow.
“Remaining performance obligations sit at $37.5 billion, and deferred revenue climbed to $5,975.2 million from $1,577.5 million at year-end.”
Why Not CoreWeave, Meta, or NVIDIA
I prefer Nebius over CoreWeave, Meta, and NVIDIA due to proprietary software and strategic customer relationships.
“I own NBIS instead of CoreWeave (NASDAQ:CRWV) because Nebius stacks proprietary software above the metal.”
Risk I Live With
Three customers made up 24%, 21%, and 14% of Q2 revenue with $8.5 billion convertible debt.
“Three customers made up 24%, 21%, and 14% of Q2 revenue. Convertible debt carries at $8.5 billion with a fair value of $20.8 billion.”
What Keeps the Buy Button Active
Contracted power guidance raised to 5 gigawatts by year-end with CEO Arkady Volozh predicting 2026 is just the beginning.
“Contracted power guidance was raised to 5 gigawatts by year-end. Vera Rubin systems were already in Nebius labs at the time of the Q2 call.”
The Secret
Nebius' secret: repeat buys despite GAAP loss and high debt by leveraging $37.5 billion backlog and anchor customers.
“The reason sits inside a single contract detail that most investors scroll right past.”
The essence
Nebius Group keeps investors buying despite GAAP operating loss and $8.5 billion convertible debt by leveraging a $37.5 billion backlog and anchor customers in AI model training.
