Outro

In this conversation, Doug sits down with Sinan Xin, managing partner at Amber Road, to discuss the “lost art” of international investing and dive deep on Nebius ($NBIS) — a misunderstood name in the global AI infrastructure ecosystem. Sinan has followed the company since its spinout from Yandex and built a position around $25 post-relisting earlier this year. Here he explains why Nebius now represents 10% of his fund.

They unpack Nebius’ origins inside “Russia’s Google,” its transformation into a neutral global AI compute provider, and the overlooked value of its 28% stake in ClickHouse. The discussion covers how Nebius differs from peers like CoreWeave, what investors miss about its payback economics, and why Sinan believes the market is overlooking a potential $200 stock hiding in plain sight.

1. Action:Maintain a core long in Nebius (NBIS). Keep it as a top-three holding given its asymmetric setup, global customers, and accelerating AI infrastructure growth.

2. Understanding:Nebius operates an AI infrastructure-as-a-service platform spun out from Yandex. It builds and rents compute, storage, and networking capacity (like AWS or CoreWeave) and owns 28% of ClickHouse — a fast-growing open-source database. Customers include Tesla, Anthropic, ByteDance, MercadoLibre, and Microsoft.

3. Valuation:At ~$125–130, the stock trades near 15x implied earnings power, discounting a 10% ROIC versus management’s 25–40% long-term goal. A four-year payback supports a ~$200/share valuation with ~30% downside to $85. No premium is priced for platform optionality.

4. Mispricing:Investors overreact to “Russian risk,” missing that the firm is now based in Western Europe and Israel. Skepticism around GPU depreciation also clouds sentiment. The market overlooks:

• Global neutrality (can serve U.S., EU, and EM customers)

• ClickHouse stake worth near the entire EV

• Software-driven margin expansion

  
  

5. Variant View:The Street views Nebius as a capital-heavy GPU host. Sinan views it as a technology company, not a leasing business. With software heritage and higher-margin products (ClickHouse, ML ops, AI APIs), Nebius should earn AWS-like ROIC, not colocation-style returns.

6. Evidence:

• Global contracts with Microsoft, Anthropic, and Tesla

• ClickHouse stake last valued near $6B; next raise likely $20B+

• Added U.S.-based execs to scale go-to-market

• 40%+ utilization growth; payback trending to 3 years

• 1,300 engineers from Yandex — proven technical base

  
  

7. Catalysts:

• Next ClickHouse funding round and potential monetization

• New hyperscaler or enterprise partnerships

• Index inclusion and rising institutional ownership

• Disclosure of improving ROIC and payback metrics

• Recognition that Nebius is an AI software platform

  
  

8. Upside:Base case $200/share (~60% upside); bull case $220–250 if ClickHouse valuation rises and incremental capacity earns 25%+ ROIC — assuming no multiple expansion.

9. Risks:GPU cost compression, political or regulatory backlash, deployment delays, or overestimation of ClickHouse profitability.

10. Alignment:Founders and early engineers hold significant equity. Management is equity-compensated and performance-driven, with a culture of technologists, not financiers.

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