IF YOU OWN COREWEAVE NEBIUS STOCK... GET READY

Welcome back guys to another episode of what the chip happened. This is in my opinion the greatest semiconductor and AI YouTube channel out right now. Now on today's episode I want to take a closer look at core. This is my biggest biggest cost basis position in my overall portfolio. We're talking six figures here on just cost basis investment. So this week is going to be big because they are reporting earnings and throughout this episode we are going to take a closer look at some of the things I am heavily heavily watching during the earnings call. But but before we get there, Nebus, another very popular Neocloud company, is also reporting earnings this week. And I want to start off the episode because I know there's a lot of viewers that are curious what Nebius is going to report. Some of the commentary that we have gotten in the past few weeks, in the past few months since last earnings, what is to be expected this quarter, and what are the some of the things that we should keep a closer eye on for the rest of the year. So, let's take a closer look in today's episode. But before we begin, if you're serious about semiconductor and AI investing, I break down major earnings and conferences inside my community, institutional quality research built for retail investors. Get 33% off at whatthechipappen.com. Like I mentioned in the intro, this is a big week for me, for my overall portfolio, but I think it's also a big week for a lot of NeoCloud players because you have Nebas as well, which is a very, very popular Neocloud stock. You also have some other companies, but before we go there, I do have a quick favor from you guys, right? I want you all if you can to just donate 10. Just kidding. I don't need you to donate anything. But this past Friday was my brother-in-law's uh wedding. He got married. Um my brother Matthew. He got married to his wife Natalie. If everybody in the watching this, can you show some love and say congratulations to Matt and Natt or Matthew Natalie, however you want to go. I truly truly appreciate it and I think they would. Right. So if you can show some love below. Now back to the episode, right? We have Super Micro on Tuesday, we have Cororeweave on Tuesday, and we have Momentum on Tuesday. So, a lot of different AI semiconductor companies are going to be reporting. Now, we are finished with a lot of the big names in the semiconductor days. We're done with the big tech. I think now is a lot of the growth opportunities or those with various tailwinds coming later this year or next year. For example, on Wednesday, we do have Cerebras and Coherent. On Thursday, we do have a big big equipment player with applied materials. But even though most of the cool and popular semiconductor and AI stocks are have been done already or have reported already, I think there's still a lot and a lot of information that we can get from these upcoming earnings as well. Now, the other thing that I want to mention is I'm extremely bullish in the NeoCloud market. I think intelligence and tokens are a very strong market. We continue to see compute is extremely low. That demand uh and supply imbalance is is still there. Uh you have so much more demand composed to the supply and tokens that you have and we continue to see massive growth rates in revenue from anthropic openai. And while there are a lot of fears of other players, I think just the overall market needs more compute and this is extremely bullish for the Neo cloud space at least for now. Obviously commentary can change as this is a very innovative market that has a lot of changes here and there but based on all the commentary that we have seen from the past earnings. Even SpaceX that just reported about a week ago the comments on the NeoCloud space in my opinion is very bullish if you have active power if you have GPUs if you have contracted power and both Nebus and Cororo even though they're in different parts of the overall business I do believe they both can benefit dramatically. So let's start off with Nebius. some of the things that investors should be expecting. So for June 2026, their revenue is expected to be $574 million. Typically, if you are looking at some of the numbers, typically analysts are pretty on par with a few single digits percentage either beat or underperform because it's a little bit easier for analysts to understand how much active power they have and kind of the revenue that runs with kind of these GPUs and all. So analyst expectations I'm going to guess are very are going to be very close to there. So 574 $575 million is what analyst consensus is right now. Now if some of the commentary that we heard about 3 months ago on May 13th from Nebas is they did mention on the capacity side it is back and weighted. So what does that mean? They're going to be doing a lot of investments and things are going to be turning on in the second half of this year. But but because a lot of those things are going to be turning on in the second half of this year, there is going to be a lot of investments that's happening in quarter 2. And for some of that and for that reason, they actually expect margins in quarter 2 to go a little bit lower and then in quarter 3 returning back to quarter 1 levels and stepping even higher in quarter 4. So this is something to be re uh to to understand about this overall industry is sometimes when you're buying PowerShells there's a lag before the revenue comes in right because when you buy all these GPUs when you have all these power shells you're already paying for the re for for the building you're already paying for the GPUs but it takes some times to connect all these GPUs to test all the GPUs to power them on and then to finally connect that revenue. So if you are building a nice amount of stuff and and if you're going pretty heavy like they seem to be doing in quarter two, you tend to kind of not get that revenue number just yet and it does create a a negative impact in margins. So one thing to understand is if in quarter two for Nebas you do see a dip in margins is because they are investing a nice and nice amount. They also did mention in their quarter 1 that while it remains very early quarter one of the last of their earnings, they are reinforcing their confidence in their annual targets. And they do believe that 2026 guidance on an annual revenue run rate, they would be roughly 7 to9 billion. Now that we're getting closer to uh we're just finishing quarter two and we're going to be in the second half of the year. I think we are going to see an increase in guidance. I am going to be curious to see where it's happening because what we're hearing from the rest of the industry is what pricing is increasing for a lot of these GPUs for a lot of other stuff as well and the demand continues to be um limited. So the uh the demando continues to outstrip supply which helps with the pricing power right now and I do believe with little things like that you can have the ability to increase your ARR. So their ARR for the end of this year is expected to be between 7 to 9 billion. I believe we at least see an upgrade from the lower end. The other thing that we did see last quarter is they did increase their capex for 2026 mainly driven because of the visibility the visibility that they see in 2027. So previously the capex was 16 to 20 billion. Now in the recent quarter they expect it to be 20 to 25 billion. I am going to be curious to see if anything has grown. Right, as a AI investor and with everything that we're seeing in this overall market, I wouldn't be surprised if the lower end increases. I'm not too positive about the top end, but it it would I I would say I would put money in that the bottom end we do see a capex increase regardless. A lot of these investments, they're got to make the expenses right now, right? getting the real estate, getting the Power Shell, getting the GPUs, getting the contractors, getting the engineers, the construction team, all that. You have to work ahead of time. But they believe that a lot of this revenue, these investments, you're going to see positive revenue in the first half of 2027. And I mean, if we look at fiscal.ai, you kind of see a nice step up in revenue. So, in June, you expect 575. In September, nearly 900 million. In December, almost $1.5 billion in revenue. in March roughly 2.2 billion. So you're seeing this massive massive growth in revenue expectations. The final thing that we do have for for for Nebus' you have demand is crazy. But like I mentioned earlier on the chief revenue off officer also mentioned that they continue to see pricing grow stronger uh across both old and new GPU uh generation as demand continues to exceed available capacity. They just raised their prices in the latest quarter. I'm pretty sure they're going to do it again. And even with that, they are seeing sold out. And more importantly, they're also seeing contract durations are extending with the average duration of contracts growing meaningfully over the past few years. Now, that's a little bit of both bullish and bearish in my opinion for Nebius, right? And Nebius has done extremely well yearto date. The stock is up roughly 108%. Some people say the bullish reason for Nebas is they tend to have shorter contracts and with shorter contracts you are able to be a little bit more favorable on the pricing because if pricing continue to go up and every 3 months you get to renew, you get to renew at that newer upgraded pricing. But if you're seeing the longer contracts, the bullish side is now you have visibility of revenue, but you're most likely locking contract at some floor and ceiling. So there's puts and takes with the longer contracts and it's something investors should definitely be familiar with. Now, if you want to compare some of the NeoCloud players, I have created a website for my community. Definitely check it out at whatthechipappen.com. This is my power terminal where you can compare all the Neocloud players. For me, Cororeweave is my favorite. I mean, it's the biggest in terms of operational size. One over one gawatt of operational power right now compared to Nebus who has 310. We're going to see in revenue numbers, there's a big difference in revenue. I'm not saying one is better than the other. I personally enjoy corore reef but if you ever want to see kind of the difference between backlog core reef over hundred billion dollars in backlog um nebas right now is increasing that backlog a nice amount but there's difference in active power in debt in interest payments and the list goes on and on some people favor nebas I do favor core right now but I'm not saying one is better than the other I think everybody just needs their own investment thesis now we are also seeing revenue right in forms of revenue nebus is doing like we saw $400 million in the most recent quarter. For Core Weave, we're doing about $2.1 billion in revenue per quarter and we are going to see and we continue to see that grow. Now, Cororeweave is the other company we're going to discuss obviously and year to date unfortunately hasn't performed like Nebas right sitting at 14% yearto date which is not crazy not crazy extremely volatile I am still very much bullish a market cap of $50 billion with 1 gawatt of active power with hundred billion in backlog this is where I really want to focus the rest of the episode for June of this upcoming quarter the market is expecting somewhere around $2.5.6 6 billion in revenue. But then you continue to see that massive growth, right? September 26, 3.4, December 4.5. You're seeing billion dollar jumps in the next few quarters due to the amount of investments that they're making. Now, they are reaffirming their fullear guidance. This is not ARR. Their revenue for this full year, they're expected to do somewhere between 12 to 13 billion and adjusted operating income of roughly $1.1 billion on the top end. just for this quarter again 2.5 to$2.6 billion and they do expect quarter 2 adjusted operating income to be positive as margins expand from their quarter 1 lows. So they are saying that quarter 1 was the lowest of their margins right now and this kind of trajectory of growth in margins is expected to begin in quarter 2. If we actually see that I think that's extremely extremely bullish. Now the main reason for them is they started with a very little power last year and they grew dramatically and just like I mentioned earlier on when you're making this investments there is a good portion of time when you're not collecting revenue and you're already collecting a lot of expenses and for that reason if you're expanding dramatically it takes a huge huge hit on margins but because of the capacity further ramps in the coming quarters they do expect that quarter 1 was their lowest price point. Um uh now they are more than 1 gawatt of capacity and they did mention that they're approaching escape velocity and continue to expect adjusted operating margins to expand sequentially for the remainder of the year returning to low double digits by quarter 4. Uh, one of the biggest bottlenecks for them or not bottlenecks, headwinds and a lot of bearish sentiments is their massive interest expenses. So, roughly 650 to 730 million because they have this massive debt. But it is important to remember that a lot of these contracts that they make are multif-year contracts. So, they do have this in their spreadsheet, right? Their basis model, they understood what kind of interest rates they would be taking. A lot of the market doesn't understand this. They're like, "Oh no, how are they going to pay all this all this interest and all this debt that they're doing?" It was part of their plan. So, it's not as crazy as some people make it seem. For the full year, they do expect Capex to be 31 to 35 billion. One of the main reasons is they did see an increase in component pricing. The long-term contracted revenue, like I mentioned, over a hundred billion dollars of backlog, allows them to feel confident of the money that they're going to make. And they expect their annualized revenue run rate for 2026 to be 18 to$19 billion, increasing their lower end by $1 billion. Uh they also mentioned that a good portion of capacity is ramping up in quarter 2 and quarter 3. This is something I am going to be curious to learn more about. Are there any delays, any issues? Because if they are, that's what's going to help unfortunately make them miss expectations. But I don't think we're going to see any of that. They are growing pretty strongly in their overall capacity. And now being over 1 gigawatt gets me pretty excited because this is now a massive massive NeoCloud player. They also continue to expect to grow their annualized revenue run rate to more than 30 billion by 2027. and they already mentioned that more than 75% of which is already contracted excluding any benefit from not yet exercised customer renewals. So if those customers do renew the $30 billion by 2027 almost seems like a dead given. Um and they already secure sufficient power capacity to deliver on their 2027 targets. Just like what Nebius mentions, they are selling H100s at prices higher than they were selling them before. So overall things are extremely bullish. I think for core investors and for myself the biggest thing I am looking for is was quarter 1 really the bottom in margins. If it was I am going to be very excited. If it wasn't and they gave us negative commentary about that I think the ma m the market is going to hate coreweave even even more. Um, regardless, very similar to Nebas, I do expect maybe an increase in ARR, maybe a uh increase in some of the guidance expectations, and at least on the lower end, also an increase in capix just because how crazy how crazy the market is. For Core, they're also focusing a lot in other software plays as well and licensing deals. I'm curious to learn about more throughout this upcoming earnings. So, I will be doing a live stream of Core Wave earnings. Make sure to hit the thumbs up. Make sure to hit the subscribe button. And if you want to definitely check out the application I've created on the AI infrastructure terminal, make sure to check out whatthechipappen.com. Take care. Have a good day. And see you all next