These Two Stocks Will Lead The Neocloud Boom

Okay, and then then when this news came out or this kind of like false news or misleading news it caused the dip. >> Correct. >> Across all Neo clouds, right? Okay. >> Yes, correct. >> Right. >> So, that that's >> market misunderstood it, right? Basically the market misunderstood what that meant. It was a little over reactive. >> Correct. And so that that's actually a good segment to where the opportunity is cuz there's a lot of names that are down that um basically added to my positions or so first one I want to talk about is CoreWeave. So their origin story is one of the better pivots in recent business history. They were founded in 2027. They were Ethereum mining operation and then they pivoted to GPU as a service in 2019. So they were early. By 2023 they were renting H100s at $8 per hour during the peak like GPU shortage. They basically saw this trade before anyone else did and they positioned it very accordingly. Today they are the operational scale leader in in the space in the entire Neo cloud space. And if you look at the chart I want to everyone to see what the customer commitment picture looks like. Just this year alone OpenAI committed 11.9 billion dollars through 2030. Another 4 billion through 2029. Another 6.5 billion to 2031. That's over 21 billion just from OpenAI. Then you have Nvidia signed a 6 and a half billion 6.3 billion deal with with through them 2032. Nvidia is literally a paying customer. It is also an equity investor as well. Then you have Meta. Meta is going to committed 14.2 billion through 2031 and then added another 21 billion through 2032 in March of this year. Anthropic also signed a multi-billion dealer deal with them and then you have Jane Street, one of the one of the quant quantitative firms trading firms, also signed a $6 billion deal in April. So, total deals from that from that table alone is roughly six 6.3 63.9 billion. And that is not even the full backlog. That is just from this year. Their full RPO is 99.4 billion dollars. >> What's RPO? >> Uh backlog. >> Backlog. Okay. So, so what is it what is it what is backlog? >> Yeah, remaining performance obligation which basically means they have Yeah, they basically have essentially like 99 billion dollars that's supposed to come in in the next, you know, X amount of years. >> Holy Okay. >> Yeah, but what's interesting is they essentially have a bigger backlog than their entire market cap. Their market cap is around like 50 billion dollars. And they have a Yeah, and they have a backlog of, you know, 99.4 billion dollars. And and as for demand for compute increases, Coreweave will benefit from this greatly. Coreweave currently has 1 gigawatts of live active data data center capacity and they also hold 3.5 gigawatts of contracted power capacity across this portfolio. So, this is what I mean when I say like they have these deals already signed, they have, you know, 3.5 gigawatts of power and the company is actually looking to scale about 8 gigawatts of active power by 2030. So, they're expanding massively. But to be fair, there is a lot of problems with with this Not a whole lot of problems. The main problem is their debt. They have a total of 24.9 billion dollars in total debt. That they have roughly interest expense of 536 million in a single quarter. Net loss of 740 million dollars. But what I do want to what I do want to say here is the the model their business model is designed to be front-loaded. Free cash flow for them doesn't even turn positive till 2029-2030. As revenue grow faster than the debt debt stack. Like I know they have a lot of in interest, but that shall that'll be backed backstopped by their revenue growth. And by the time they get to 2029-2030. And they're essentially just building the infrastructure right now and all the revenue will come in later. Same This is the same argument you can make for the hyperscalers right now and kind of the reason why they're kind of down is because they want the you know the revenue to come in. But you know it won't come in for another few more years. That's the same deal with Core Weave. >> Just going to pause there for a second to point out that the market is showing signs of something kind of different happening. And our analysts at MicroPro are all over it. They spent the last couple weeks making a lot of trades, getting out of some positions, and then getting into a lot of new ones, getting ready for the next wave of robotics, space, or even kind of picking some different AI winners. If you want to see what they have in their portfolios, what positions they're opening, it's just a dollar in MicroPro at the link below. Right. So, similar to everybody else, they have all these deals signed for a long time. And those are commitments. Like we just saw on that slide, right? It's like that's a lot of great money, but it's not it's not 63.9 billion today. It's not money that's delivered immediately. It's CapEx money, right? Like we said at the start, it's part of that 1.2 trillion that's going to come out. And on paper, that's what's been committed to, but those are timelines you were looking at right now is like four four to six years in there. So, that they will get that money over time. >> Correct. >> But it's not money in the pocket right now. >> That is correct. >> And same with a lot of people. Same with a lot of these commitments over the next 5 years and 10 years and however long it is. >> Absolutely. And but one of the reasons or one of the things is companies are continuing to raise their capex. So all that money will eventually get, you know, paid out. Uh so I expect these capex to continue to rise into 2028, 2029 even. Um somewhere around maybe 2029 it'll probably peak, but uh um but by that time hopefully our infrastructure layer is all built out. Um then at 2029 probably is when Elon will probably launch and start to build out the space infrastructure needed for in space. So that'll be that'll be interesting to watch as well. >> Tell me about another company that you like in the space. >> Yeah, I think my favorite one is called Nevius. Um it's at around $211. They have a rough market cap of $52 billion. And like I said, this is one of my favorite stock in this entire sector. This company has a really cool backstory as well. They were actually a successor to a company called Yan- Yandex. If you don't know what Yandex is, it's basically you can think of Google of Russia. Um they had search engine, um they had their search engine, maps, ride-sharing e-commerce cloud businesses, um and essentially Yan- Yandex was the dominant um internet platform across Russia for several decades actually. Then what happened was then in Russia Russia actually invaded Ukraine in 2022 and that basically changed everything um because Yandex ended up, you know, selling their entire Russian business for about four to five to six billion dollars at, you know, at fire sale prices. They basically handed over a multi-decade, you know, empire for cents on the dollar cuz they just wanted to get out. Um, the company essentially renamed themselves to Nebius and started rebuilding from scratch as a AI cloud business using and using that proceeds to build out from that build out the AI infrastructure. Um, and they have, you know, when they left Yandex, they had a whole bunch of engineers. They had a killer team. Um, so that's one of the reasons why I like it because they already built companies. They were in business for decades. This is a great company. This is a great The founder is incredible. If you listen some of his interviews, he's an impeccable, impeccable, um, founder. Um, now let's get into the numbers because they're accelerating at a speed that is like very hard hard to fathom right now. Um, Nebius AI cloud essentially grew 841% year-over-year in quarter one of 2026. They did 389.7 million in AI cloud revenue in a single quarter growing from zero to just, you know, that number in two years. Um, their total revenue came in at 399 million at 74% gross margin. And their full year guidance for this year is 3 to 4 billion um, with or in revenue with an annualized rate of 79 billion dollars by end of the year. Um, to put that in perspective, it took AWS, um, you know, Amazon Web Services, much, much longer to reach that revenue at scale. Um, and Nebius just basically did that in two years. Um, and they also have the very long um, backlog as well like CoreWeave. Um, they signed uh, seven 17.4 billion dollar deal with uh, Microsoft in September of last year. Um, that was Meta also committed 12 billion dollars in capacity for 2026 and about 2027 billion dollars worth in total. And then top of that, like I said, Nvidia put in 2 billion dollars of investment in March of this year. That means, you know, they get, you know, the cool thing about every time Nvidia invests in one of these companies is that investment means they get GPU allocation faster, deeper technical integration, the the access to the first generation next generation hardware. So, this actually the funniest thing was the the Nebius actually posted something today that they have taken a delivery of Nvidia Spectrum 6 1002.4T Ethereum switch from Nvidia today. And they got early access for that because they they their their deep relationship with Jensen and you know, Nvidia. So, this is why I love companies that invest Nvidia invests in cuz Nvidia is essentially the kingmaker of this AI infrastructure, you know? So, the more you can get closer to Jensen, the better it is for your companies and how your company is going to grow. >> Real-world assets like funds, treasuries, and private credit are still running on rails built decades ago. Gated, paperwork-heavy, slow to settle. Everyone's talking about tokenizing them, but far fewer can actually do it and do it without cutting regulatory corners. Securitize can. It's the SEC-regulated infrastructure bringing real-world assets on chain. Nine years in, native tokenization, not wrapped, backed by BlackRock, Morgan Stanley, and Cathie Wood's Ark Invest, and chosen by the New York Stock Exchange, VanEck, BNY, and Apollo to do it at scale. It's the regulated bridge between traditional finance and crypto. Tokenize the world at milkroad.com/securitize. >> So, is that is that is that is that one of the the reasons you're you're like is that the reason you're most bullish, really, is the affiliations Nvidia and Jensen taking those positions, or is it just the general CapEx need and and commitments already? >> Yeah, affiliation, CapEx, the need for compute, and also because Nebius has a killer team. I you know, CEO is great, their entire team is full of very very experienced engineers running Yandex, and they have other killer businesses as well, which I will get into in a little bit but >> Mhm. >> yeah, [clears throat] and also what's cool is Nebius has contracted over 3 billion 3 gigawatts of power capacity globally globally and is targeting about 4 gigawatts in total by this year. What's cool is like there is a need for massive amounts of compute, which is not not just in the US, outside of the US, like in Europe, you know? So, Nebius is the leading leading for that. So, they broke their you know, what's cool is they broke their first US scale CapEx campus in Missouri with Meta this year. Then they announced a second one in Pennsylvania. In Europe, they're actually building a 310 megawatt data center in Finland. They have three locations across UK. They have deals with like the British government. So, this is genuinely a global like build out that's happening all across the world and Nebius is essentially, you know, building that out. But what's what's different why I like this better than Coreweave is because Nebius actually has 9.3 billion dollars in cash on their balance sheet without any meaningful debt net debt. Whereas like you you look at Coreweave which has a 25 billion dollars in debt. Debt. So, if something was to go wrong, like let's say the rates goes up or something, you know, obviously as the rates goes up, you're going to have to pay more in interest. They're essentially bulletproof at the moment. They they have they have money on the balance sheet. So, that makes them a way better company than Corvus. >> How guaranteed is that money that's committed to Corvus and Nebius? >> A lot of it is it's the agreements that I talked about. So, even if they even if they like they have to pay up. Like there's no there's no way around it. So, um a lot of it a lot of it is already baked in. So, it's very very bulletproof. >> Mhm. Mhm. Okay. [clears throat] Uh you mentioned other businesses that Nebius has. Is that Is that Is that We're almost out of time, Melvin. So, is that a different podcast or is that a today thing? >> [music] >> Want to stay ahead of the biggest technological shift in history? 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