$Nebius(NBIS.US)Context: Share price of Nebius is falling, giving back some recent gains. Investors grew more cautious a…
$Nebius(NBIS.US)
Context: Share price of Nebius is falling, giving back some recent gains. Investors grew more cautious about AI infrastructure spending as oil prices rose and tech stocks fell. Brent crude rose above $112 per barrel amid renewed Middle East tensions. Higher oil prices fuel inflation fears and could keep interest rates high. This could raise borrowing costs for AI infrastructure firms that need billions to build data centers. Weak reactions to tech earnings also added to market pressure. Higher borrowing costs could make data center projects more expensive for CoreWeave, Nebius, and IREN. If the cost of expansion rises faster than revenue, their profits could come under pressure.
My Trade: Nothing changes. The potential for growth remains, but the funding risk is also there. Risk to reward ratio might be off at current prices, so I'm waiting for lower prices before considering adding.
Takeaway: Nebius face funding risks, implied from the Coreweave situation from last week. Nebius also needs capital to expand its data center capacity and meet demand for AI computing. Investors will watch whether revenue growth can support the cost of this expansion. @Captain's Treasure
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