Thesis summary and international edge

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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