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More from @mvcinvesting

M. V. Cunha

@mvcinvesting

Oct 13, 2025

Everyone's talking about Rare Earth Elements (REEs), but few truly understand why they matter.

In this thread, I'll break down what makes REEs so critical, the global imbalance threatening supply chains, and the biggest challenge that still needs to be solved.

🧵👇🏻

1) What Are Rare Earth Elements (REEs)?

Despite the name, REEs are not geologically rare. The term refers to a group of 17 chemically similar elements: the 15 lanthanides (atomic numbers 57–71) plus scandium and yttrium. These elements typically occur together in mineral deposits, making their separation and extraction complex and resource-intensive.

Since their discovery in the late 18th century, starting with yttrium, named after the Swedish village of Ytterby, REEs have gradually become integral to modern life. They enable critical functionality in technologies such as smartphones, electric vehicles, wind turbines, medical imaging devices, advanced defense systems, robotics, and more.

Because of their unique magnetic, luminescent, and electrochemical properties, REEs are often described as the “vitamins” of modern industry.

2) Why Rare Earths Matter

REEs are foundational to the technologies that define the 21st-century economy and global security landscape. From decarbonizing energy systems to building autonomous weapons and intelligent machines, REEs are indispensable to innovation, infrastructure, and sovereignty.

Powering the Clean Energy Revolution

As nations pursue aggressive climate goals, REEs are increasingly recognized as non-substitutable components in technologies driving the energy transition:

Neodymium and dysprosium are used to create high-performance permanent magnets in EV motors, wind turbines, and hydrogen fuel cells. These magnets deliver exceptional strength in compact formats, allowing for lighter, more efficient, and longer-lasting systems.

Lanthanum and cerium are essential in automotive catalytic converters, battery electrodes, and energy-efficient lighting, technologies that reduce emissions and improve fuel economy.

Europium, terbium, and yttrium are critical in phosphors that illuminate LED screens, television displays, and medical imaging systems, offering not just efficiency but also clarity and precision in visualization technologies.

In short, REEs are at the heart of the global shift toward cleaner, smarter, and more resilient energy systems.

Enabling Robotics, AI, and Automation

The rise of robotics and AI adds another layer to the strategic importance of rare earths. These technologies rely on advanced electromechanical components, high-speed data processing, and sensor fusion systems, all of which depend on rare earth-enabled materials.

Permanent magnets made from neodymium, dysprosium, and praseodymium are critical in robotic actuators and motors, which drive movement in industrial robots, drones, surgical robotics, and autonomous vehicles. Without these lightweight, high-efficiency magnets, the precision and dexterity of modern robots would be severely limited.

High-performance sensors, such as those used in LiDAR systems, machine vision, and real-time environmental mapping, rely on rare earths for signal clarity and stability. These sensors are vital in autonomous navigation, object recognition, and situational awareness, key pillars of AI-driven machines.

In data centers and AI infrastructure, rare earths help in cooling systems and high-frequency components that support machine learning algorithms, language models, and high-performance computing. As AI models become more compute-intensive, the demand for rare earths in power-dense and thermally sensitive environments is expected to surge.

This convergence of REEs with AI and robotics positions them as critical enablers of the next industrial revolution, where intelligent machines will augment or replace human labor across logistics, healthcare, manufacturing, agriculture, and defense.

National Security and Defense

The military also leans heavily on REEs for advanced weapon systems, communication equipment, and surveillance technologies:

Samarium-cobalt magnets are used in systems where thermal stability is paramount — such as missile guidance systems, fighter jet engines, and satellite communication arrays.

Technologies like night vision goggles, laser targeting devices, and stealth radar depend on rare earth materials for optical precision, energy efficiency, and electromagnetic resilience.

Autonomous military systems, including unmanned ground vehicles (UGVs) and drones, rely on the same robotics and AI capabilities discussed earlier. Again, underpinned by REEs.

As geopolitical tensions rise and warfare becomes increasingly digitized and autonomous, control over rare earth supply chains becomes a direct determinant of defense readiness.

All in all, rare earths are no longer “just another commodity”. Their role in clean energy, AI, robotics, and national defense makes them strategic resources, the backbone of future economic power and military superiority. For that reason, secure access to REEs is non-negotiable.

Read 9 tweets

M. V. Cunha

@mvcinvesting

Jul 28, 2025

As a highly concentrated investor, I rarely initiate new sizable positions.

However, over the past few weeks, I’ve been steadily buying $PGY.

I believe it could be an asymmetric opportunity over the next 12–24 months.

Here’s a Deep Dive explaining my investment thesis: 🧵👇🏻

1. Origins

$PGY was founded in 2016 in Israel by Gal Krubiner (CEO), Avital Pardo (CTO), and Yahav Yulzari (CBO), three longtime friends and entrepreneurs who had already worked together on real estate and finance ventures prior to starting the company. Their friendship and shared entrepreneurial spirit laid the groundwork for what would later become one of Israel’s most notable fintech success stories.

The inspiration for $PGY emerged not from a single idea, but from a deep, ongoing conversation between the three co-founders about the future of finance. As Gal Krubiner recalled in an interview, a pivotal phone call changed their trajectory: “Real estate is nice, finance is nice, but tech is where the magic is happening.” They realized that to truly build something impactful and scalable, they had to move beyond traditional asset classes and embrace the power of technology, particularly AI and data science.

Their entry point into tech-enabled finance began with peer-to-peer lending, which at the time was a nascent and loosely defined segment. As they studied it more closely, the opportunity became clear: consumer credit was a $4T market, and yet it was underserved by traditional financial institutions and largely ignored by institutional asset managers. The trio saw a massive gap between demand and access, particularly among consumers who were deemed “unscorable” by legacy credit systems.

The company’s name, Pagaya, is derived from the Hebrew word פגיעה (pagiah), meaning “impact” or “connection.” This reflects the firm’s mission: to bridge the disconnect between borrowers and lenders, data and decision-making, capital and opportunity.

Founding Philosophy: Data Over FICO

$PGY's core insight was that legacy credit scoring systems, especially the widely used FICO model, were not equipped to assess modern credit risk. FICO is static, backward-looking, and rule-based, relying on a limited set of historical variables. This leaves out entire segments of the population: immigrants, gig workers, young professionals, or anyone without a long credit history. These consumers may be creditworthy, but the system fails to recognize their potential.

$PGY's founders believed that machine learning and alternative data could unlock access to credit for these underserved individuals. Drawing from Avital Pardo’s experience as the first data scientist at Fundbox, the team built AI models capable of ingesting hundreds of variables per applicant, including bank transactions, income patterns, job history, and behavioral indicators, to assess creditworthiness in real time.

Rather than becoming a lender themselves, they envisioned $PGY as a B2B2C infrastructure layer. The idea was to embed their AI models directly into the origination workflows of banks, credit unions, and fintech lenders. This would allow financial institutions to say “yes” more often while maintaining risk discipline, and without $PGY needing a banking license or large balance sheet.

Early Days and Initial Capital

$PGY launched its first major product in personal loans, initially under an asset management model that used AI to guide investment decisions. The company raised capital to manage on behalf of institutions and launched the Pagaya Opportunity Fund in 2018. Early investors believed the technology had the potential to one day manage sovereign-level capital.

However, as the founders would later acknowledge, the initial business model had limitations. The market for electronic, AI-driven asset management was not yet mature enough to support rapid scaling. By 2019, the team made a decisive pivot: rather than solely managing money, $PGY would offer its AI infrastructure directly to U.S. lenders to improve underwriting decisions. That transition, from AI-driven asset management to an embedded lending platform, was a defining moment in the company’s journey.

Growth and Transition to the U.S.

From that inflection point, $PGY rapidly expanded across the U.S. consumer credit market. The U.S. offered scale, regulatory fragmentation, and a deep ABS market, all favorable conditions for $PGY's model. The company soon began diversifying beyond personal loans into auto lending and point-of-sale (POS) financing. In 2024, it relocated its headquarters to New York City, a strategic move to strengthen relationships with institutional investors and reinforce its presence in the U.S. financial ecosystem.

$PGY's API-based integration allowed banks and fintechs to embed its AI underwriting tools seamlessly into their lending flows. The result was a frictionless experience for consumers, and a powerful tool for lenders to expand credit access responsibly.

One of $PGY's most important early milestones was partnering with U.S. Bank, one of the top five banks in the country. This institutional validation unlocked further growth and helped attract other top-tier financial partners.

SPAC Merger and Public Listing

In June 2022, $PGY went public via a SPAC merger with EJF Acquisition Corp, in a deal that valued the company at $8.5B on a pro forma basis. The listing was one of the largest fintech SPAC transactions to date and provided Pagaya with significant capital to scale its AI platform, expand lending partnerships, and deepen its U.S. presence.

Shortly after going public, $PGY became the subject of intense market speculation. In late July 2022, a dramatic short squeeze sent the stock surging by more than 1,000% in a matter of days, briefly making it one of the most talked-about SPAC stocks of the year. The float was extremely limited due to the high redemption rate by SPAC shareholders prior to the merger, which contributed to the sharp volatility and attracted retail trading interest.

However, the rally was short-lived. As the float gradually increased and liquidity returned, $PGY's stock price collapsed almost as quickly as it had risen. The extreme volatility drew scrutiny and contributed to broader skepticism surrounding SPAC structures, especially in the fintech space.

Compounding this were difficult macroeconomic conditions. Rising interest rates, tightening liquidity, and a sharp slowdown in consumer lending activity weighed on $PGY's core business. The company faced several problems that created significant pressure on reported earnings and sentiment, further exacerbating the stock’s decline throughout 2022 and into 2023.

Despite these headwinds, $PGY remained focused on strengthening its platform fundamentals. The company continued to expand its network of bank and fintech partners, and refined its AI-driven underwriting models. This strategic focus, coupled with a shift toward more capital-efficient structures, positioned the company to emerge from the downturn as a more resilient and scalable infrastructure provider.

“That experience matured us. Emotionally, it was a rollercoaster. For employees, it was the dream and its collapse, and all the noise made it hard to focus. But we came through it. There’s now a strong understanding and connection between the team and our business results. Ultimately, we’re helping people get access to credit, and that clarified our mission.”

2. Business Model (Executive Summary)

$PGY operates a distinct B2B2C fintech platform that leverages AI to underwrite consumer credit at scale. Unlike traditional lenders, $PGY neither originates loans nor holds significant long-term exposure to them. Instead, its core business revolves around using proprietary AI models to assess credit applications, enable seamless loan origination through banking partners, and monetize the process via fee income tied to both underwriting and capital markets activities.

This model, asset-light, fee-driven, and data-centric, positions $PGY as a "technology-first enabler" in the lending ecosystem. It combines AI-driven underwriting with capital markets structuring to serve a dual customer base: (1) lending institutions seeking better loan decisioning and (2) institutional investors looking for yield-generating consumer credit exposure.

Read 17 tweets

M. V. Cunha

@mvcinvesting

Jul 3, 2025

I recently added a new position to my portfolio.

In my view, this is a potentially asymmetric opportunity with explosive upside over the next 2-5 years.

Here’s a detailed breakdown of my investment thesis for $CLPT: 👇🏻🧵

1) Origins

The origins of $CLPT trace back to the fall of 1998, when a pioneering group of researchers at Johns Hopkins University set out to redefine the use of MRI technology. At the time, MRI (Magnetic Resonance Imaging) was strictly a diagnostic tool — used to visualize anatomy and detect abnormalities. However, this team, led by Dr. Paul Bottomley, then head of Advanced MR Research at Johns Hopkins, envisioned a far more ambitious application.

Alongside Dr. Bottomley were Drs. Elias Zerhouni, Ergin Atalar, and Henry Halperin — all renowned scientists in their fields. Together, they envisioned using MRI not just to see inside the body, but to guide medical procedures in real time, enabling minimally invasive interventions with unprecedented precision. This idea laid the technological and clinical foundation for what later became known as real-time, MRI-guided therapy.

To commercialize this breakthrough concept, the company Surgi-Vision, Inc. was incorporated in Delaware in 1998. In 2008, the company rebranded slightly to SurgiVision, Inc., signaling early steps toward refining its identity and commercial appeal. However, the most meaningful shift occurred in 2011, when the company changed its name to MRI Interventions, Inc., reflecting its commitment to real-time, MRI-guided procedures — a segment in which it would eventually lead with its flagship ClearPoint® system.

Finally, in 2020, the company adopted its current name, ClearPoint Neuro, Inc., aligning its corporate identity with the brand recognition of its most prominent product and signaling its broader ambition in the field of neuro-navigation and targeted drug delivery. The name “ClearPoint” has since become synonymous with precision-guided neurosurgery, positioning the company as a key enabler in the advancement of minimally invasive therapies for neurological disorders.

This evolution — from general surgical imaging to a focused neuro-intervention platform — reflects the company’s adaptive strategy and its ability to carve out a differentiated niche at the intersection of neurosurgery, medical devices, and biotechnology.

2) Business Model (1/2)

$CLPT operates a hybrid business model that straddles medical devices and drug delivery, with a clear long-term ambition: to become the backbone infrastructure for minimally invasive neurological procedures — both surgical and therapeutic. The company generates revenue through three distinct yet complementary pillars: neurosurgical disposables, biologics and drug delivery services, and capital equipment and software.

1. Neurosurgical Navigation & Therapy

The ClearPoint system enables MRI-guided procedures such as laser ablation, deep brain stimulation (DBS), and brain biopsies. Each procedure relies on proprietary, single-use consumables — such as SmartFrames, guidance cannulas, and infusion systems, three of the company’s products — billed per case. This creates a recurring, procedure-driven revenue model that does not require hospitals to make significant upfront infrastructure investments.

Beyond disposables, $CLPT provides clinical specialists who support surgeons in the operating room — a service that fosters long-term surgeon loyalty, though it carries higher delivery costs. In Q1 2025, this segment grew 70% YoY to $3.3M, driven by rising adoption of the SmartFrame OR and the PRISM Laser Therapy System. Management reported 35 procedures completed by 11 different surgeons using SmartFrame OR in early 2025 — demonstrating materially improved commercialization execution compared to the previous launch.

Importantly, the company’s latest navigation software (version 3.0) and the SmartFrame OR device enable neurosurgical procedures to migrate from MRI suites to traditional operating rooms, unlocking new hospital customers and increasing throughput. This software-hardware pairing is already seeing strong adoption and reorder intent from early users. Here’s why this is important:

MRI-Based vs. OR-Based Procedures

Historically, $CLPT's platform has been tightly integrated with the MRI suite because it offers real-time, high-precision imaging during complex neurosurgical procedures. This makes it especially valuable in cases where sub-millimeter accuracy is critical, such as:

• Deep Brain Stimulation (DBS) for movement disorders
• Drug delivery procedures, including those performed in clinical trials or pre-commercial programs with pharma partners

However, with the introduction of the 3.0 software, $CLPT is now expanding its footprint into the operating room (OR) setting.

Strategic Role of the OR: Unlocking MRI Capacity

ClearPoint’s 3.0 software allows hospitals to shift certain procedures — such as routine or standard DBS cases — from the MRI suite to the OR. This is particularly valuable because:

• Drug delivery procedures will increasingly require MRI access, given the need for real-time visualization and verification of infusion quality.
• These procedures can be longer in duration due to multiple trajectories or slow infusion times, which could otherwise block MRI access for standard cases.

By moving lower-complexity procedures to the OR, $CLPT helps hospitals free up MRI capacity in anticipation of future growth in therapeutic drug delivery — a market the company expects to expand significantly over the next 2–3 years.

Forward-Looking Mix and Flexibility

The CEO Joseph Burnett outlined a fluid trajectory for the MRI vs. OR procedural mix:

• Near-term: DBS procedures may grow faster in the OR setting as hospitals adopt the 3.0 software.
• Longer-term: MRI-dependent drug therapies could increase MRI suite usage again, reinforcing the company’s MRI leadership.

This dynamic mix reinforces ClearPoint’s dual-capability platform strategy, ensuring it remains well-positioned to support both current surgical demand and future biologic delivery innovations.

Essentially:

• OR compatibility via the 3.0 software represents a meaningful expansion of ClearPoint’s total addressable market, especially among hospitals with limited MRI availability.

• The company’s infrastructure strategy aligns with pharma timelines, ensuring readiness for broader adoption of gene and cell therapy delivery via MRI in the coming years.

• Supporting both MRI and OR workflows enhances customer retention and commercial flexibility — an important differentiator in the neurosurgical navigation space.

Read 12 tweets

M. V. Cunha

@mvcinvesting

May 20, 2025

Today, $NBIS released its Q1 2025 results.

As you know, this is the largest position in my portfolio, so it was definitely the one I was most looking forward to reviewing.

In this thread, I’ll break down everything you need to know about the Earnings Report: 🧵👇🏻

1. Financial Highlights

Before diving into the numbers, let me first reiterate what I was looking for in this report:

“After receiving several questions about what I’m expecting, here’s my Earnings Preview.

Let’s start with what doesn’t matter:

I’m not concerned about whether NBIS beats or misses Q1 consensus estimates for revenue, EBITDA, or EPS. Why? To start, there are only three analysts covering the stock, so each estimate carries disproportionate weight. Second, and more importantly, the ARR ramp-up happened during Q1, meaning revenue recognition this quarter will largely depend on the timing of those contracts. As a result, these numbers may not reflect the true trajectory of the business.

What does matter to me:

1) March ARR guidance of “at least” $220M:

This figure was provided on the last earnings call, based on already signed contracts and with more potential deals in the pipeline.

I’d be very disappointed if NBIS doesn’t meet this number. It's their own guidance — not a Street estimate.

2) Year-end ARR guidance ($750M–$1B):

I’d like to see this guidance at least reaffirmed. Based on the company’s GPU fleet and current expansion plans, a raise is possible — but given that we’re only in May, I wouldn’t be surprised to see management remain cautious.

(This guidance was already raised in December, from the previous $500M–$1B range provided in October.)”

Now, here’s what the company delivered:

• Revenue: $55.3M vs. $57.7M est.
• Adj. EBITDA: $(62.6M) vs. $(94.4M) est.
• EPS: $(0.39) vs. $(0.45) est.

While Q1 revenue came in slightly below expectations, profitability metrics were materially better than anticipated. But again, that’s not what matters most.

• March ARR came in at $249M, exceeding the $220M+ guidance (+175% QoQ and +684% YoY, absolutely mindblowing)

• April ARR reached $310M, showing an impressive +25% MoM growth

• Year-end ARR guidance was reaffirmed at $750M–$1B

• FY2025 Revenue guidance of $500M–$700M

• Adj. EBITDA turning positive in H2 2025, with the core business expected to be breakeven as soon as Q3

• Mid-term Revenue guidance: “Mid-single-digit billions”

• Mid-term Adj. EBIT margin target of 20–30%, with a long-term goal of 30%+

“You know, the reality is that there are scenarios where we could grow more aggressively. Andre and his team are focused on building out the entire infrastructure pipeline, which could enable us to deliver more than 1 GW of capacity in the midterm. If we do that, we could exceed the midterm guidance we’ve provided. We’ll be opportunistic and pursue opportunities as they arise. I think the key drivers of incremental growth beyond our midterm guidance will be increased adoption by enterprise-level customers and larger, longer-term contracts.”

In other words, the already strong mid-term guidance could be conservative.

Importantly, the company is targeting 30%+ long-term EBIT margins while using a 4-year depreciation schedule on GPUs — which is more conservative than CoreWeave’s 6-year horizon. Even under these prudent accounting assumptions, $NBIS still expects to deliver exceptional margin performance at scale.

That’s because this isn’t just a neocloud or GPU lessor — Nebius offers software and platform services that sit on top of the infrastructure stack. This vertically integrated model is a key competitive differentiator, bringing in stickier customers and enabling AWS-like profitability at scale.

• Cash Position: $1.44B
• Debt: None — resulting in low interest burden

“We anticipate maintaining relatively low levels of debt, which means we’ll be able to reinvest a significant portion of our revenue to drive value creation in our core AI infrastructure business.”

• Capex for the remainder of 2025: $1.55B

The company remains disciplined and transparent about its capital structure. Management stated clearly that dilution will be avoided as much as possible (but is inevitable at some point), and they plan to leverage subsidiaries to raise non-dilutive funding.

One example:

“Should ClickHouse have a liquidity event in the near-to-mid term, this would provide us with significant capital to invest into our core business.”

$NBIS holds a 28% stake in ClickHouse, which is currently valued at $6B and might potentially IPO in the future, creating a potential cash windfall.

Another key asset is Avride, a fast-growing subsidiary that management believes is worth several billion dollars:

“We are actively exploring strategic investments and partnerships to help accelerate its growth.”

As Founder & CEO Arkady Volozh put it:

“There’s no other company in this sector that can raise potentially billions of dollars in this non-dilutive way.”

The opportunity is HUGE and $NBIS has the technology, talent and funding flexibility to successfully capture it.

If you want to understand the various competitive advantages $NBIS holds in more detail, you can read my full Deep Dive via the link in my bio.

2. Current Infrastructure and Expansion Plans

$NBIS made significant strides in scaling its AI infrastructure during Q1 2025. The company's GPU fleet currently consists mostly of NVIDIA H200s, complemented by H100s. Looking ahead, $NBIS plans to begin deploying the next generation of chips — including NVIDIA B200s in Q2 and both Grace Blackwells and Blackwell Ultras in the second half of the year. These upgrades are expected to substantially increase the company’s total compute capacity by the end of 2025.

At the same time, $NBIS has been rapidly growing its data center footprint across multiple regions. Over the past three quarters, the company has evolved from a single site in Finland to a globally distributed network with multiple strategic locations. Key milestones include:

• Iceland: A new colocation site launched in March 2025.
• Kansas City, U.S.: Came online in April 2025, now fully operational and soon to be running B200 GPUs.
• New Jersey, U.S.: Announced in March 2025, this custom-built facility is under active construction and follows Nebius’ proprietary efficiency-driven design standards.

The company continues to evaluate additional sites globally. As Arkady Volozh noted, $NBIS will begin development on a new site in Israel, with more locations likely to be announced soon:

“We are actively exploring new sites in the U.S. and around the world, and we expect to provide more news on this soon.”

$NBIS expects to reach at least 100 MW of contracted data center capacity by the end of 2025, a substantial increase from its prior guidance of 60–100 MW shared just seven months ago. This tells me that the $750M–$1B ARR guidance for the end of the year will be easily achieved — and has a strong chance of being surpassed.

Looking further ahead, management expects to significantly grow capacity in 2026.

The company's aggressive buildout is not just about scale, but about enabling a differentiated offering. As management explained:

“With our expanding capacity footprint and global sales support, we are now able to serve customers 24/7 with a truly tailored approach. Our high-level experts on both sides of the Atlantic, combined with our advanced software platform, go far beyond commoditized GPU-as-a-service offerings. Our customers recognize that we’re building an AI-specialized cloud with hyperscaler-level capabilities.”

Read 12 tweets

M. V. Cunha

@mvcinvesting

May 13, 2025

$NBIS is my largest position — and it’s finally starting to catch the attention of more investors.

I’ve been talking about it for months, so it's time to condense everything in a detailed thread.

Here’s why I believe $NBIS is one of the best opportunities in the market: 👇🏻🧵

1. Origins: From Yandex to Nebius Group

The story of $NBIS begins inside one of the most iconic tech companies to emerge from Eastern Europe: Yandex. Often dubbed the “Google of Russia”, Yandex was a digital powerhouse, dominating search, maps, ride-hailing, e-commerce, and AI in Russia and surrounding markets. At its peak, it was a $30B company and one of the most successful tech stories in the region.

Then, everything changed.

In early 2022, Russia’s invasion of Ukraine set off a geopolitical and moral reckoning for thousands of Yandex employees. Around 2,000 engineers, product leaders, and researchers — along with key members of Yandex’s founding team — made a bold decision: they would not be complicit. They chose to walk away from the Russian business, even if it meant leaving behind their homes, careers, and in some cases, their families.

This moral stand set in motion one of the most complex corporate restructurings in recent memory. Over the following two years, Yandex navigated sanctions, shareholder pressure, and mounting political scrutiny to ultimately divest all of its Russia-based assets. By mid-2024, a formal separation was completed.

And that’s how $NBIS was born.

Today, $NBIS is a completely independent company — composed of Nebius (AI cloud), Avride (autonomous driving), Toloka (data labeling), TripleTen (edtech), and a 28% stake in ClickHouse, the fast-growing open-source database platform. The group is legally and operationally severed from Yandex’s Russian operations. Its leadership and board have acquired Dutch or Israeli citizenship, ensuring full compliance with international sanctions and signaling a clean break from its origins.

While $NBIS inherits Yandex’s deep engineering DNA — particularly in AI infrastructure, distributed systems, and cloud computing — it is now pursuing a fundamentally different mission: to become a global leader in AI cloud services.

But with AI dominating headlines and investor attention, how is NBIS still flying under the radar?

The answer lies in its unconventional path to the public markets. Due to its roots within Yandex, $NBIS bypassed the traditional IPO process entirely. There was no roadshow, no investor marketing, and virtually no institutional coverage.

In fact, according to the company’s Founder and CEO, they were caught off guard by the listing. On a Friday, they received a call from Nasdaq informing them that Yandex’s legacy listing would transition to Nebius on Monday — just three days later. The team had to scramble to meet compliance requirements and prepare investor materials with almost no advance notice.

As a result, the stock debuted with minimal visibility. Analyst coverage is still limited, and a large portion of the float remains in the hands of retail investors.

This disconnect — between the quality of the business and its lack of market visibility — is precisely what makes $NBIS one of the most compelling and asymmetric opportunities in tech today.

As the company continues to execute on its ambitious expansion plans, it's likely only a matter of time before the broader market takes notice.

2. Core Business Explained

The AI revolution is accelerating, pushing the boundaries of what’s technologically possible — but also exposing the severe limitations of today’s compute infrastructure. As demand for AI capabilities explodes, the need for purpose-built, scalable, and efficient compute infrastructure has become one of the most urgent bottlenecks in the tech industry.

$NBIS exists to help solve that.

Positioned at the cutting edge of the global AI infrastructure market, $NBIS is building the backbone of tomorrow’s AI economy. Its mission is to deliver the infrastructure, tools, and services required to support AI innovation at scale. With ambitions to scale its operations to thousands of megawatts of GPU compute capacity, $NBIS is enabling startups, enterprises, and researchers alike to build, train, and deploy cutting-edge AI models — all on a single integrated platform.

At its core, $NBIS is a next-generation AI infrastructure company, often referred to as a “neocloud.” Unlike traditional cloud providers that retrofitted their platforms for AI, Nebius was purpose-built from the ground up for AI workloads. It combines deep expertise in hardware and software development with large-scale GPU deployments to deliver a full-stack solution designed specifically for the demands of modern AI development.

A Three-Layered Architecture: Infrastructure, Platform, and Applications

$NBIS operates across three primary layers — infrastructure, platform, and applications — creating an end-to-end ecosystem that addresses every step of the AI development lifecycle.

1. Comprehensive AI Infrastructure

Unlike many cloud providers that rely on off-the-shelf hardware and outsourced services, Nebius controls the entire value chain of its infrastructure. This full-stack control translates into both performance gains and economic efficiency:

• Custom Data Centers: Engineered for energy efficiency and high-density compute, Nebius’ data centers allow for better unit economics and scalability.

• In-House Server Design: Servers are custom-built to optimize GPU utilization and deployment speed — beyond the GPU itself — giving Nebius a competitive edge in cost and performance.

• End-to-End Stack: From hardware manufacturing to cloud orchestration, Nebius owns every layer, enabling tight integration, faster innovation cycles, and better cost controls.

• Managed Services: Tools like Apache Spark, MLflow, and others are seamlessly integrated, letting users focus on development rather than infrastructure management.

2. AI-Centric Cloud Platform

At the platform level, $NBIS has developed an AI-native cloud computing environment tailored to the needs of ML and DL practitioners. The platform integrates large-scale GPU clusters, scalable object storage, and managed tools into a cohesive offering:

• AI-Optimized Compute: Support for training, fine-tuning, and inference on some of the most advanced GPUs available, including NVIDIA H100s, H200s, and the upcoming Blackwells.

• Elastic Scalability: Whether it’s a single experiment or a massive training run, users can scale their compute resources up or down with ease.

• Low Latency & High Reliability: Proprietary cloud software and in-house hardware design ensure minimal downtime and consistent performance under load.

This cloud environment gives AI developers everything they need to build and deploy models in one place — with significantly less friction compared to general-purpose cloud services.

3. AI Studio: Inference-as-a-Service

On top of its platform and infrastructure stack, $NBIS offers AI Studio, a SaaS environment that simplifies access to powerful open-source AI models via APIs. Designed for both researchers and commercial users, the AI Studio enables fast, cost-efficient deployment of foundational models across a range of use cases:

• Plug-and-Play AI: Integration with popular models like ChatGPT, Gemini, LLama, Mistral, Qwen, DeepSeek, and others.

• Wide Model Coverage: From text generation and image synthesis to embedding models for Retrieval-Augmented Generation (RAG) systems, AI Studio supports a broad spectrum of AI applications.

• Fast Model Onboarding: Nebius can integrate trending models within days or even hours — exemplified by its rapid deployment of DeepSeek models.

• User-Friendly Interface: Pre-configured environments drastically reduce setup time.

• Market-Leading Cost Efficiency: One of the lowest price-per-token (if not the lowest) offerings for inference currently available.

This platform is particularly well-suited for customers who don’t want to manage complex infrastructure but still want to experiment, prototype, or deploy AI applications at scale.

Today, $NBIS is one of the largest non-U.S. providers of AI infrastructure. The global market for GPUs is intensely competitive: while the majority of AI chips are used internally by model developers like OpenAI, Google, Microsoft, and Meta, only a fraction — around 10–20% — are made available to public cloud users via hyperscalers such as AWS or Oracle.

The remaining 30–40% of GPU supply is fragmented across dozens of alternative players — but only a handful, including CoreWeave, Lambda Labs, Together(.)ai, Deep Infra, and Nebius, possess the technical and financial capabilities to deploy large-scale infrastructure and serve global demand. Among these, Nebius stands out for its ability to serve a wide spectrum of clients, from startups and research labs to enterprise customers and AI product builders.

As its Founder & CEO, Arkady Volozh, puts it:

“We are one of the few alternatives capable of serving the core needs of major players, supplying GPUs to startups and corporate clients looking to purchase infrastructure, and supporting smaller clients who use models deployed by us. We are giving customers the freedom to choose.”

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M. V. Cunha

@mvcinvesting

May 6, 2025

Everyone’s talking about $HIMS now, but I’ve been covering it since it was trading in the low single digits.

I’ve analyzed every single quarterly report since late 2020.

Here’s a detailed breakdown of everything you need to know about yesterday’s Earnings Report: 👇🏻🧵

1. Let's start with the Financial Highlights.

• Revenue: $586M (+111% YoY) vs. $538.9M est. 🟢

This marks the strongest revenue growth ever for $HIMS, driven largely by explosive demand for compounded GLP-1s. While the company expects a meaningful deceleration in this category as commercial semaglutide comes off shortage, revenue is still projected to grow >60% YoY in 2025.

• Revenue excluding GLP-1s: “Growth of nearly 30% YoY”

A sharp deceleration from previous quarters, likely contributing to the post-earnings stock selloff. However, the slowdown stems from a strategic reallocation of marketing spend toward weight loss products in anticipation of the semaglutide shortage ending. With the transition complete, $HIMS can now refocus on its broader portfolio — suggesting core revenue growth could accelerate from here.

“Rotation takes time to do efficiently, so we chose to reduce overall spend as opposed to recalibrate weight-related spend to other categories after the end of the semaglutide shortage in February.”

At the same time:

“We're seeing more subscribers come to our platform through organic and other lower-cost channels.”

• Subscribers: 2.366M (+38% YoY)

• Monthly Online Revenue per Avg Subscriber: $84 (+53% YoY)

A substantial increase, again, primarily driven by GLP-1 offerings. However, $HIMS guided that this number will moderate going forward as users transition from its compounded GLP-1s.

• Q2 Revenue Guidance: $540M vs. $567M est. 🔴

Another factor contributing to the selloff is that this marks the first time $HIMS has missed guidance and projected a sequential decline in revenue. This is clearly tied to the resolution of the semaglutide shortage, and it was unrealistic to expect the company to sustain triple-digit growth without the outsized contribution from compounded GLP-1s. As such, I wouldn’t draw overly negative conclusions from this guidance miss.

• Gross Margin: 73% vs. 77% est. 🔴 (down from 82% YoY)

While certain efficiencies continued to improve — particularly through economies of scale driven by increased volume at affiliated pharmacies and lower medical consultation costs as a percentage of revenue — gross margins declined due to a higher mix of revenue from compounded GLP-1s. With the semaglutide shortage now resolved, this trend is expected to reverse, and the CFO stated during the earnings call that gross margins should improve in Q2.

• Adj. EBITDA: $91.1M vs. $61.8M est. (+182% YoY) 🟢

• GAAP EPS: $0.20 vs. $0.12 est. 🟢

• Operating Cash Flow: $109M (+322% YoY)

• Free Cash Flow: $50.1M (+321% YoY)

• Reiterates FY2025 Revenue guidance of $2.3-2.4B vs. $2.323B est. (+56-63%) 🟢

• Raises FY2025 Adj. EBITDA guidance to $295-335M vs. $296.6M est. (+67-90%) 🟢

2. Every GAAP operating expense category continued to decline as a percentage of revenue, highlighting the strong efficiency of $HIMS' business model and its impressive ability to unlock operating leverage at scale.

On marketing efficiency, management noted:

“We benefited from efficiencies related to new product launches and improving organic customer acquisition trends, which more than offset higher spend driven in part by our first Super Bowl commercial.”

While some quarter-to-quarter volatility is expected, the company remains confident in its ability to drive 1 to 3 percentage points of marketing leverage per year.

As a result, $HIMS managed to double its net profit margin while simultaneously doubling its revenue YoY, leading to a fourfold increase in GAAP EPS over the past twelve months — an exceptional performance by any standard.

The same momentum is evident in its cash flow generation. While FCF wasn’t as high as in prior quarters, it still grew by 321% YoY, and operating cash flow reached a new all-time high. The only reason FCF didn’t follow suit was due to a deliberate increase in Capex aimed at strengthening infrastructure. These investments are strategically aligned with the company’s long-term vision and will reinforce $HIMS' competitive advantages and leadership in the sector.

Given the company’s strong balance sheet and highly efficient business model, allocating capital toward long-term infrastructure — even at the expense of short-term margins — appears to be a prudent and value-accretive decision.

Examples of recent Capex investments designed to enhance infrastructure and support the company’s long-term goal of serving tens of millions of subscribers:

• Expanded internal fulfillment footprint from 400K to nearly 700K sq. ft. in Arizona

• Upgraded automation equipment to enable personalized and scalable precision medicine

• Built out sterile fulfillment capacity to support new categories like low testosterone therapy and menopause support

• Investing in diagnostic lab capabilities to enhance personalization and lower consumer friction

In summary, these infrastructure investments reflect $HIMS' clear intention to build a durable, defensible platform capable of scaling efficiently over the long term. Rather than optimizing for short-term gains, the company is positioning itself to capitalize on massive future demand across multiple high-growth categories — a strategic approach that underscores both management’s discipline and the strength of the underlying business model.

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