Alright, alright, alright... so Wall Street's got a new darling. Nebius, huh? The next Nvidia, they're saying. Give me a freakin' break.
The Hype Train is Leaving the Station
Look, I get it. Everyone's chasing the AI dragon after watching Nvidia's stock go vertical. 1,000% rise in three years? That's insane. Suddenly, every company with a GPU cluster and a cloud server is the second coming. And Nebius is the latest flavor of the week.
They're slinging neocloud services, letting companies rent GPU capacity instead of blowing their entire budget on hardware. Sounds good on paper, right? Microsoft throws them $17.4 billion over five years. Meta kicks in another $3 billion. Not bad. Not bad at all.
And Nebius management is projecting $7 to $9 billion in annualized run-rate revenue (ARR) by the end of 2026. Okay, that's a spicy meatball. But let's pump the brakes for a second. Because there's always a "but," isn't there?
Follow the Money (and the Losses)
Here's the reality check: Nebius reported a net loss of $508 million through the first nine months of 2025. Half a BILLION dollars in the red. And how are they planning to fund their "near-term expansion"? By resorting to an at-the-market offering. Translation: they're selling stock to raise cash because they're burning through it faster than a Tesla at a drag race.
They've got $2.4 billion of cash on the balance sheet, which sounds like a lot until you realize how quickly that disappears when you're building data centers full of Nvidia chips. Which, offcourse, ain't cheap.
Nebius stock (NBIS) is trading at $95.20 right now. An implied forward price-to-sales (P/S) ratio of about 5.5 based on 2027 GAAP revenue. Is that cheap? Expensive? Honestly, who the hell knows anymore? The market's so frothy right now, you could slap a .AI domain on a potato and it would probably double in value.
At the end of September, their annualized run-rate revenue (ARR) was $551 million. So, they've got a long way to go to hit that $7 to $9 billion target. And what happens if Microsoft or Meta decides to change their minds? Or if AMD comes out with a chip that's just as good as Nvidia's, undercutting their entire business model?
These "neocloud" companies are essentially acting as middlemen, buying up expensive GPUs and renting them out. It's like being a landlord in the AI gold rush. You don't need to mine the gold yourself, just collect rent from the suckers who do. But what happens when the gold runs out? Or when someone builds a better apartment building?
The Nvidia Shadow
And let's not forget the elephant in the room: Nvidia. The company that started this whole AI frenzy. The company whose GPUs are the lifeblood of every AI model out there. Nebius is just riding Nvidia's coattails. They're a parasite, not a pioneer. Am I being too harsh? Maybe. Then again, maybe I'm not harsh enough. Some analysts believe that CoreWeave (CRWV), Nebius, IREN Are Rising from the Q3 Fall, which could signal a buying opportunity.
Nebius is a compelling stock to own in the AI infrastructure era, sure. But labeling it as the next Nvidia? That's just plain stupid. Comparing Nebius to Nvidia is like comparing a lemonade stand to Coca-Cola. One's a scrappy startup, the other's a global behemoth.
So, What's the Real Story?
Look, Nebius might be a good investment. It might even be a great investment. But it's not the next Nvidia. It's just another overhyped AI play that's trying to cash in on the feeding frenzy. Don't get caught holding the bag when the music stops.
