steven fiorillo
A Discussion On CoreWeave and Nebius with Sam Badawi
10/21/2025, 11:15:28 PM
Economic Summary
- The emergence of ChatGPT and LLMs has sharply increased demand for accelerated computing (GPUs), driving hyperscalers and cloud customers to expand data-center capacity (benefitting GPU suppliers like NVDA and data-center contractors).
- Hyperscalers (AWS, Azure, Google Cloud) face supply constraints for AI compute, leading them to sign multi-year external contracts (example: Microsoft–Nebbius ~$17.4B multi-year deal), implying years-long buildouts and revenue visibility for colo providers.
- Large tech CapEx remains substantial but supported by strong free cash flow — e.g., Microsoft, Alphabet, and Meta generate tens of billions in FCF even while spending heavily on CapEx — enabling continued infrastructure investment (MSFT, GOOGL, META).
- Smaller data-center operators that own more of the stack (land, buildings, hardware, software) can lock in cost advantages and potentially higher margins versus pure colocation/rental models, making vertically integrated players attractive.
- Energy supply and costs are a critical input for the AI/data-center boom; companies with access to cheaper electricity or energy contracting expertise (noted examples: IREN, nuclear-related names CCJ/CEG, and the URA ETF) have a competitive edge.
Bullish
- Nebbius: owns vertical stack, large Microsoft contract validates demand.
- Strong AI/GPU-driven demand supports long-term growth for data-center specialists.
- IREN: low energy costs and fast capacity buildout enable competitive advantage.
- Amazon (AMZN): AWS, advertising, and robotics drive margin expansion and durable cash flow.
- Nvidia (NVDA): continued demand for accelerated compute (GPUs) powers the ecosystem.
Bearish
- High volatility and big run-ups can lead to severe drawdowns in small data-center names.
- Triple-digit revenue growth for companies like IREN and NEBBIUS is unlikely to be sustained long term.
- Multi-year buildouts (4–5 year deals) mean revenues and profits can lag expectations and be delayed.
- Geopolitical/regulatory history and asset sales (e.g., Nebbius' Russian divestiture) add execution and risk uncertainty.
Bullish tickers
NEBBIUSIRENAMZNNVDAMELIAPLD
Bearish tickers
NEBBIUSIREN
NEBBIUS
3 price targets
302070
Bullish
Vertical-stack operator with decades of experience and a ~$17.4B Microsoft multi-year contract validating demand.
Bearish
Extremely volatile after large run-up; execution and multi-year build risk could cause big drawdowns.
IREN
Bullish
Low energy costs, experienced management, and aggressive gigawatt buildout give competitive advantage.
Bearish
Triple-digit growth projections may be unsustainable and depend on timely capacity delivery.
COREWEAVE
Bullish
Specialist in AI workload hosting and co-location, benefiting from hyperscaler GPU demand.
Bearish
Private/smaller players face margin and scaling risks versus hyperscalers and larger contractors.
CORE SCIENTIFIC
Bullish
Has been used as a source of repurposed servers and capacity for AI/data workloads.
Bearish
Transitioning bitcoin-mining assets into data-center capacity carries execution and asset-conversion risk.
APLD
Bullish
Applied Digital has secured deals and builds bespoke data-center capacity for cloud/hyperscaler clients.
Bearish
Execution and client concentration risks as backlogs convert to revenue.
WULF
Bullish
Terawulf-type deals show hyperscalers contracting external capacity to secure compute.
Bearish
Depends on long-term off-take agreements; customer disclosure and counterparty execution risk.
NVDA
Bullish
Leader in accelerated compute; surging AI demand makes NVDA critical to the ecosystem.
Bearish
Exposure to cyclical GPU demand could amplify downside in a macro slowdown.
AMZN
Bullish
AWS, advertising, and robotics offer durable, high-margin growth and large free cash flow potential.
Bearish
Large CapEx and execution on new initiatives could pressure margins if investments underperform.
MSFT
Bullish
Hyperscaler demand and enterprise cloud positioning support durable growth despite heavy CapEx.
Bearish
High CapEx spend requires continued monetization of cloud investments.
GOOGL
Bullish
Google Cloud is expanding and partners with external colo providers to meet AI compute demand.
Bearish
Large-scale cloud contracts and capacity buys may pressure margins if growth slows.
META
Bullish
Strong FCF and high-margin businesses support ongoing infrastructure spending for AI.
Bearish
Heavy investments in AI and infrastructure can lead to uneven near-term returns.
AVGO
Bullish
Broadcom chips are part of large hyperscaler procurement for AI and data-center builds.
Bearish
Concentration in networking/semiconductors exposes it to cyclical enterprise spend.
AMD
Bullish
Supplies chips contracted by hyperscalers for accelerated compute alongside NVIDIA.
Bearish
Competition and pricing pressure in GPUs/datacenter CPUs could impact growth.
MELI
Bullish
MercadoLibre benefits from massive e-commerce growth in Latin America and logistics investments.
Bearish
Emerging-market execution and macro volatility could impact expansion.
WMT
Bullish
Huge top-line scale and retail footprint; Amazon may overtake but Walmart remains massive revenue generator.
Bearish
Low margins in retail constrain profit expansion vs. tech peers.
CCJ
Bullish
Key play on nuclear energy, which underpins long-term energy needs for data centers.
Bearish
Nuclear exposure can be regulatory and timeline dependent.
CEG
Bullish
Direct exposure to operational nuclear generation supporting grid reliability and baseload power.
Bearish
Utility-scale nuclear investments carry permitting and capital risk.
URA
Bullish
Provides diversified exposure to nuclear/uranium sector for energy-driven infrastructure demand.
Bearish
ETF exposure includes speculative and developmental uranium players.
People mentioned
SamAndy JassyJeff BezosMatt GarmanSatya NadellaSundar PichaiDan RobertsTan