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Joined February 2017
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Star-lord retweeted
$NBIS
Rosenblatt just called the blue wave a "relative non-event" for $NBIS, I 100% agree
The two big data center states that flipped were Texas and Georgia.
Nebius's biggest planned US expansions? Missouri, Pennsylvania and South Carolina.
And even in Texas, the governor-elect says her pause is for future data centers. The ones already approved get to finish, which covers most of what's being built there for 2027.
So the stock got dumped along with the Texas names... without actually having the Texas risk… talk about the market being irrational
If Texas does slow down new permits, the AI demand doesn't just vanish. It goes looking for powered land somewhere else, and Nebius already has sites in Alabama, Missouri and Pennsylvania.
Star-lord retweeted
According to Korean media, Samsung and SK Hynix already price in a MEMORY crash that has not happened.
Samsung Securities worked BACKWARD from today's stock prices and to justify where the shares trade, memory average selling prices would need to fall about 39.5% for Samsung and about 29.3% for SK Hynix by 2027.
Strip out HBM, and the implied collapse gets even uglier because conventional memory prices would need to fall about 45.7% for Samsung and about 35.9% for SK Hynix.
The analysts are not forecasting that crash and they are saying the STOCK MARKET is already treating it as the base case.
According to Korean media, South Korea's stock market just hit the PANIC button.
The KOSPI fell more than 8% in the first minutes of trading and broke below 5,000, triggering a 20 minute circuit breaker.
Samsung Electronics and SK Hynix both plunged around 10% or more at the open as the AI selloff on Wall Street spilled into Asia.
The index later bounced and was last seen around 5,165, down about 4%, with Samsung and SK Hynix still deep in the red but off their worst levels.
Retail investors have been heavy buyers of those two chip names through the selloff, so Seoul just suspended the 140% margin collateral rule for securities firms for three months starting November 9.
That is the same emergency tool Korea used in 2022 to stop forced margin liquidations.
$MU $NVDA $AVGO $TSM
Star-lord retweeted
People forgetting that $nbis owns 25% of clickhouse
$NBIS now trades at 0.66x 2027 ARR.
Bargain of a century.
Market cap is currently $43B.
Deduct $10B for subsidiaries like ClickHouse.
So $33B for the AI Cloud, which will hit ~$10B ARR this year.
They will bring more than 1GW online in 2027.
But let's assume just 1GW.
They could currently sell that capacity for $40-50B.
Let's assume some of it is already assigned at lower prices and some will be sold at higher spot prices.
So, to keep it simple, let's just take the lower end and assume they'll make $40B from it, plus $10B from existing deals and capacity.
Cloud business at $33B while hitting $50B ARR.
So $NBIS is trading at 0.66x next year's ARR.
We are in PEAK FEAR and AI DENIAL right now, NOT bubble territory.
Whoever says Nebius is expensive is outing themselves as clueless.
This is the bargain of a century.
Star-lord retweeted
I'm going to give a contrarian take on Neoclouds like $NBIS and say the theme looks compelling after the valuation crash.
Since there's a reason why Elon's $SPCX is heavily focused on this market full of "guppies" that would die:
He sees how attractive the economics are after selling compute to $GOOGL and Anthropic.
And this is reflected by his actions not words, from SpaceX's recent $40B financing for GPUs procurement.
$AMZN, $MSFT, and even $META also see how profitable the economics are and are accelerating their AI DC buildouts.
I'd argue if a Neocloud has:
- Close relationships with $NVDA + others for allocations
- Existing contracted capacity + permitting
- Well funded counterparties, such as Hyperscalers.
- Attractive economics, such as financing their procurement correctly (not the way $CRWV has with high debt interest unless they refinance).
Then I think they'll do just fine...
However, the bigger worry is more toward newer players starting financing or the permitting process, since barrier to entry has now become extremely high.
For financing, read through on $IREN earnings has shown public Neoclouds can adapt extremely well to tight markets:
As seen with their 90% prepayments for GPU capex on a 5Y deal.
Their older H100 GPUs recontracted at double their previous pricing and 12% higher contracted pricing also point against depreciation fears.
And in the case DC buildouts slow from permitting delays... it heavily favors some over others.
Rosenblatt's recent note for example stated they see little risk with $NBIS primary buildout that was in Missouri, Pennsylvania, and South Carolina.
And there's probably less risk with developers in places like Australia.
Markets have also show this infinite compute arbitrage can't go on forever, hence the reluctance to further finance capex, via things like ATMs.
But ironically, tighter financing and hypothetical restrictive permitting would increase the competitive advantage of established neoclouds.
And create a larger moat against newer DC developers.
Star-lord retweeted
Nebius will take care of you
~Jensen
Clickhouse will take care of you.
~Peter
Just buy $NBIS and chill.
Star-lord retweeted
Citrini update on the $NBIS short, that’s been so controversial.
“One quick swap we are making is $IREN for $NBIS on the short leg of the neocloud pair mostly to derisk on earnings (IREN announced and popped harder than the sector today, NBIS earnings is next week). IREN is also more stretched in balance sheet, which matters since financing reflexivity is a huge part of this.”
Star-lord retweeted
$LITE’s CEO runs a sold out business and decided to hand it over for 100% $MRVL stock.
You do not accept that structure unless you have seen the order books and know there is no slowdown.
$LITE CEO Michael Hurlston addressed the 45% selloff today.
On demand, he said “There’s a massive disconnect between what we’re seeing in our demand book and what the markets are showing. Our demand couldn’t be stronger.”
Asked whether the market reaction gives him pause on $MRVL as the buyer, he said “We really like Marvell. We think they’ve got a lot of upside from where they are, and that’s part of the reason we took all stock.”
He admitted “the timing was bad” but didn’t back off. “Our board of directors never considered anything but taking all stock,” citing diligence on Marvell’s books and design wins.
On getting the deal closed, targeted for 1H28: “It’s going to be a bumpy one.” He named regulatory approval as the biggest hurdle left.
$LITE $MRVL
Star-lord retweeted
Guys how we feeling today? I’m exhausted. My portfolio was down -10% today and I’m down -200k in the last 2 months 😂 -3% YTD after being up 45% ytd.
There's nothing enjoyable about days like this, but conviction often gets tested long before it gets rewarded. The hardest part is thinking years ahead when the market gives you every reason to sell & give up. This to shall pass.
$MU $NBIS $CRDO $AMD
Star-lord retweeted
Literally a 3B older leasing deal
On older chips…
No shit a top tier company wants to train on newest and greatest..
$IREN just said less than 16 hours ago they signed a LONG TERM deal for H100s for DOUBLE the price
This algorithm manipulation is getting insane.
MICROSOFT IS WINDING DOWN ITS DEAL TO RENT AI CLOUD CAPACITY FROM ORACLE $ORCL: BLOOMBERG
Star-lord retweeted
$MSFT is reportedly winding down older $NVDA capacity rented from $ORCL as it reviews billions in cloud deals but this looks more like a shift toward newer GPUs than a retreat from AI spending.
After all Microsoft just asked $IREN to upgrade its GB300 network for frontier models while IREN re-contracted older H100s at double their original price suggesting AI demand is shifting across GPU generations.
$be should be up 20%+ on this news
Star-lord retweeted
When it comes to growth stocks... the pendulum always swings too far in both directions.
Back in April should $AAOI have been trading at 12x NTM revs? guess not (see chart below)
Fast forward 7 months to today/tonight... should $AAOI be trading at 1x NTM revs? probably not
Keep this in mind... investors are always too bullish at the highs and too bearish at the lows.
This is starting to remind me of 2022/2023 when so many growth stocks became really disconnected from their fundamentals... they got oversold... they got washed out... investors gave up on them and many missed the ensuing rallies.
$APP was up ~600% in the 18 months after it's December 2022 lows
$PLTR was up ~300% in the 18 months after it's December 2022 lows
$UBER was up ~200% in the 18 months after it's June 2022 lows
$NVDA was up ~700% in the 18 months after it's October 2022 lows
$HIMS was up ~200% in the 18 months after it's May 2022 lows.
$CVNA was up ~2,200% in the 18 months after it's December 2022 lows
$META was up ~400% in the 18 months after it's October 2022 lows
$SMCI was up ~700% in the 18 months after it's April 2022 lows
$CRWD was up ~300% in the 18 months after it's January 2023 lows
$NFLX was up ~200% in the 18 months after it's May 2022 lows
$RKLB was up ~1,500% in the 18 months after it's April 2024 lows
$CELH was up ~300% in the 18 months after it's May 2022 lows
$TSLA was up ~150% in the 18 months after it's January 2023 lows
and the winner is $ASTS which was up ~4,000% in the 18 months after it's April 2024 lows.
Reality check:
- was this a perfect earnings report from $AAOI? no
- are there minor things to dislike in the report? yes
- did they guide to 200% YoY revenue growth in Q4? yes
- did the guide to 500k units per month by end of 2026? yes
- did they guide to 1M units per month by end of 2027? yes
- does this mean they can do 250-300% revenue growth in 2027? yes
- should the stock be trading at 1x 2027 revs? of course not
- is this market a flaming pile of shit? yes
- do fundamentals and valuations matter right now? no
- will fundamentals and valuations matter again some day? hope so
Have a good night.
Let's hope tomorrow is better than today.
The price action on $AAOI is almost comical because it just shows how short sighted investors can be. If you take a step back... look at the reported numbers, look at the guidance and read through the press release it's quite obvious there's a lot to be excited about.
$AAOI reported Q3 revs of $269.9M which was a tiny beat vs consensus of $268.1M but still up +128% YoY.
The stock is probably down AH because the midpoint of Q4 guidance is slightly below consensus... they said Q4 revs will be $385M to $420M with the sell side at $420M.
The midpoint on their Q4 guidance still implies +200% YoY revenue growth... is this market so fucked up that +200% growth is now disappointing? That's just absurd.
They also said Q4 net income margins will be 12-14% which is fine by me because it puts $AAOI on track to hit 17-18% in 2027.
If you're a longer term investor... and trying to find the best asymmetric opportunities in the market with the stocks that have become completely dislocated from the fundamentals... well then I think $AAOI is near the top of that list... with this in mind the Q3 numbers really don't matter and same for Q4 although I'd still love to see them eclipse the high end of their guidance.
The biggest catalyst right now is their production expansion ramp for 800G and 1.6T transceivers.
If you read through the press release they expect 500,000+ units per month by end of 2026 and 1,000,000+ units per month by end of 2027.
This means $AAOI could be doing $250-300M per month (not including their CATV business) by end of 2026 and $500-600M per month by end of 2027.
I believe $AAOI is still on track to do $4B+ revs in 2027 and then exit the year at $6-7B ARR.
Using the midpoint of their Q4 guidance, $AAOI would do ~$1.015B revenues in 2026 which is up +123% YoY from 2025.
If they hit my $4.0B revenue target in 2027 (base case)... it puts revenue growth at ~300% for the full year... which also means the stock is now trading AH at less than 1x 2027 revs.
If I'm right and $AAOI can do $4.0B revs in 2027 with 17-18% net income margins, it implies the stock is trading AH at ~6x 2027 eps... using fully diluted 87.8M shares and assuming they do 1-2 more offerings over the next 12 months ...hopefully at much higher prices unless they used debt which might make more sense depending on the terms.
They also announced a signed LTA with a hyperscaler customer that gives them visibility.