The downward pressure for the Neo Cloud vertical right now is without question being applied from the cost of borrowing money, which is completely tethered to bond yields. As yields come back in, and they will, so the pressure on the Neo Cloud companies will be relieved. The key to success here is to be selective, this sector is not a monolith. Do your own research and conduct your own due diligence. The fundamentals of companies we own are critical. My pick in this sector is $NBIS, not that I see anything fundamentally wrong with $CRWV, $IREN or $APLD either .. I simply believe that Nebius is the strongest of the sector and even if not, great gains can be made from investing in and holding shares over the next 5 years.
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6 Comments
Nate
@hoodnate · 1d
the bond yield angle is new to me. makes me want to look at nebius properly
Rudolf de Leeuw@rudolfdeleeuw · 3h
The financing angle is the right lens. Neoclouds like NBIS, CRWV and IREN fund GPU fleets with debt, so each rise in yields hits both interest costs and the return on new capex, and the CDS distress seen on CoreWeave shows how fast sentiment can flip. Nebius looks stronger mainly on balance sheet and contract visibility, but depreciation of GPUs over 4-6 years and customer concentration with a few hyperscalers remain the real risks to margins.
Solo FIRE
@solofire · 8h
These are all money losing businesses with high risks. It's never too late to invest after waiting for them to turn profitable.
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