Nebius was Yandex, the Google of Russia, for 30 years. After the Russia Ukraine sanctions it sold the Russian assets for almost $3 billion in cash, kept the AI cloud, and relisted in 2024. That AI cloud is now about 98% of revenue, and short term compute is fetching over $40 million per megawatt.

Episode five was IREN, and the guys wanted the two neocloud cases side by side because a lot of people look at the space and see tomato, tomato. They are really different. The question the whole episode comes back to is whether the software, which Shay calls the moat in the neocloud space, can turn an insane capacity pipeline into real revenue.

They get into what Nebius actually sells beyond the chip, the hypervisor layer that makes it more like a hyperscaler than bare metal, contracts that went from a little over $10 million per megawatt to over $20 million, how Nebius stacks up against CoreWeave and IREN, the Palantir partnership, and a share count that grew 13% with $8 billion of debt behind it.

Shay is bullish. Nebius is a top 10 position in his family portfolio, and he expects the stock to stay at a commodity multiple until the first quarter of EBIT profitability, which he puts around early 2028. After that he thinks it becomes a mega cap in the new AI economy. Brad says if you had to own one neocloud it would be Nebius, and he would not have to think hard about it. He still wants to see a profit after depreciation, because to him an EBITDA margin at Nebius is what a gross margin is at another company.

Next week is leaning SoFi. If you have a better idea, tell the guys which stock deserves the next deep dive.

Watch the full episode with chapters on YouTube: https://youtu.be/BnS7oZxskoY

New episodes every Monday on The Deep End.

Nothing in this episode is investment advice. Shay discusses his own portfolio, and Nebius is a top 10 position in it. Brad's general view is neutral on the stock at this stage.