Core Insights - The article discusses the investment strategies and focus areas of The Pragmatic Investor, led by economist James Foord, emphasizing the importance of building diversified portfolios to preserve and increase wealth [1] Group 1: Investment Focus - The Pragmatic Investor covers a wide range of areas including global macro, international equities, commodities, technology, and cryptocurrencies [1] - The investment group aims to guide investors of all levels through various features such as a dedicated portfolio, weekly market updates, actionable trades, technical analysis, and a chat room for discussions [1]

Core Insights - The AI sector is experiencing rising valuations and increased capital spending, but caution is advised due to potential overvaluations and market sentiment shifts [2][4] - Bill Gates emphasized that not all high-valuation AI companies will succeed, indicating a competitive landscape [2] - BlackRock's Ben Powell highlighted that the AI infrastructure ecosystem, including chipmakers and energy suppliers, may benefit more from investments than model developers [3] Industry Overview - European regulators are urging caution regarding concentrated exposure among U.S. hyperscalers like Nvidia, Alphabet, Microsoft, and Meta, noting that market sentiment could change if growth expectations stall [4] - The European Central Bank's 2025 Financial Stability Review pointed out the need for differentiation among AI stock picks due to a mix of FOMO-driven investment and solid earnings growth [4] Investment Methodology - The list of the 15 best AI stocks to watch was curated based on financial media, ETFs, and hedge fund interest as of Q3 2025, focusing on stocks with significant upside potential [7][8] Company Highlights - Workday, Inc. (NASDAQ:WDAY) has a hedge fund holder count of 64 and an upside potential of 25.31%, but faces mixed growth signals due to market saturation [9][10] - Block, Inc. (NYSE:XYZ) has a hedge fund holder count of 64 and an upside potential of 37.47%, with sustained momentum in its Square and Cash App ecosystems [14][15] - Nebius Group N.V. (NASDAQ:NBIS) has a hedge fund holder count of 65 and an upside potential of 66.40%, with significant partnerships with Microsoft and Meta driving its growth [19][20]

Core Viewpoint - Nebius Group has experienced significant stock price volatility, with a nearly 30% decline since mid-October, driven by concerns over AI stock valuations and disappointing financial results [1][6]. Company Overview - Nebius specializes in cloud-based artificial intelligence data center services, focusing on AI model training and inference training, achieving a remarkable revenue growth of 355% to $146.1 million in Q3 2024 [4][6]. Financial Performance - The company reported a loss of $119.6 million for the three months ending in September, a significant increase from a loss of $43.6 million in the same quarter the previous year, and worse than analysts' expectations of a $97 million loss [6][11]. - The stock's market capitalization is currently $24 billion, with a current price of $93.41 [5]. Market Dynamics - The initial surge in Nebius's stock price was fueled by a multiyear, multibillion-dollar service contract with Microsoft, which attracted significant investor interest [8][9]. - The subsequent sell-off was influenced by broader market concerns regarding the overvaluation of AI stocks, leading to profit-taking among investors [9][10]. Future Outlook - Despite current losses, the company is positioned for potential growth due to its contract with Microsoft and the increasing demand for specialized AI data center solutions [11].

Core Insights - Nebius Group N.V. (NBIS) has significantly increased its capital expenditure (capex) plan for 2025 from $2 billion to $5 billion to meet the rising demand for AI infrastructure [1][10] - The company aims to exit 2025 with positive adjusted EBITDA at the group level, despite a projected adjusted EBITDA loss of $5.2 million for Q3, which is an improvement from a $45.9 million loss in the same quarter last year [3][10] - Financing for this aggressive expansion will be sourced through corporate debt, asset-backed financing, and equity, with plans to raise up to 25 million Class A shares [4][10] Capex Breakdown - The strategic capex allocation includes approximately 1% for securing land and power, 18-20% for building data centers, and around 80% for GPU deployment [2] - The accelerated investment is crucial for achieving ambitious annual recurring revenue (ARR) targets for 2025 and 2026, contingent on effective execution and sustained AI demand [5] Competitive Landscape - CoreWeave, a competitor, has reduced its 2025 capex guidance from $20-23 billion to $12-14 billion, while Microsoft is expected to increase its capex growth rate in fiscal 2026 compared to fiscal 2025 [6][7][8] - Microsoft allocated $34.9 billion in capex in Q1 of fiscal 2026, with significant investments in GPUs and CPUs to support its Azure platform [8] Market Performance - Nebius shares have declined by 6% over the past month, contrasting with a minor decline of 0.2% in the Internet – Software and Services industry [11] - The price/book ratio for NBIS shares stands at 5.38X, exceeding the industry average of 3.96X [13]

Core Viewpoint - The rise of artificial intelligence (AI) is significantly boosting sales for both ASML Holding and Nebius Group, but ASML is identified as the superior investment option in the AI sector [1][2]. ASML Overview - ASML is the sole manufacturer of extreme ultraviolet (EUV) lithography equipment, giving it a monopoly in the market and making it a critical player in the AI ecosystem [3]. - The company is projected to achieve a 15% sales growth in 2025, reaching approximately 32.5 billion euros, up from 28.3 billion euros in 2024 [3]. - ASML has shown resilience in the cyclical semiconductor industry, with consistently rising revenues over the years [4]. - The diluted earnings per share (EPS) for ASML increased to 5.48 euros in Q3, up from 5.28 euros the previous year, with a commitment to grow dividends over time [6]. - Despite anticipated sales slowdowns in China, overall AI demand is expected to sustain revenue growth into 2026 [7]. Nebius Overview - Nebius has capitalized on the AI boom by providing optimized data center computing capacity, leading to a Q3 revenue of $146.1 million, a 355% increase year-over-year [11]. - The company estimates its 2025 sales will reach between $500 million to $550 million, a significant rise from $117.5 million in 2024 [11]. - Nebius faces challenges in rapidly expanding its facilities to meet demand, resulting in stock issuance and increased debt [12]. - The company's debt has surged to over $4 billion in Q3, compared to approximately $6 million a year ago, raising concerns about financial stability [13]. - Nebius reported a net loss of $119.6 million in Q3, worsening from a loss of $94.2 million in 2024 [14]. Investment Comparison - ASML's stock has appreciated about 50% over the past year, while Nebius's stock surged approximately 300%, making it appear attractive [16]. - However, ASML is deemed the better investment due to its stable, profitable business model with consistent sales and EPS growth [17]. - ASML's price-to-sales (P/S) ratio stands at 11, significantly lower than Nebius's P/S ratio of 63, indicating a more favorable valuation for ASML [18]. - The stronger financials and key position in the AI ecosystem further solidify ASML as the superior long-term investment choice over Nebius [19].

Core Insights - The article emphasizes the importance of understanding macro trends and their influence on asset prices and investor behavior [1] - It highlights the author's extensive experience in asset management, particularly in equity analysis and research [1] Group 1: Professional Background - The author has over 10 years of experience in asset management, focusing on equity analysis, macroeconomics, and risk-managed portfolio construction [1] - The professional background includes advising on and implementing multi-asset strategies, with a strong emphasis on equities and derivatives [1] Group 2: Investment Philosophy - The article advocates for accessible and empowering investing, aiming to inspire confidence in long-term investment strategies [1] - It encourages collaboration among investors to share insights and improve investment knowledge [1]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Summary of Nebius Group Conference Call Company Overview - **Company**: Nebius Group (NasdaqGS:NBIS) - **Market Cap**: $25 billion [2] Industry Context - **Industry**: Emerging cloud infrastructure - **Growth Trajectory**: Nebius is positioned among the fastest-growing players in the tech sector, particularly in cloud infrastructure [2] Key Points and Arguments Company Strengths - **Experienced Team**: Nebius has a team of 1,000 engineers from Yandex, providing a significant advantage in scaling operations and infrastructure [6][7] - **AI Infrastructure**: The company focuses on delivering software and infrastructure tailored for AI engineers, catering to both startups and large enterprises [9] - **Scale and CapEx**: Nebius is one of the few gigawatt-scale organizations in the cloud infrastructure space, emphasizing the importance of scale in meeting market demands [10] - **Custom Solutions**: The company builds its infrastructure from scratch, allowing for tailored solutions that optimize cost and efficiency [11] Full-Stack Vision - **Integrated Platform**: Nebius aims to create a vertically integrated platform that allows AI engineers to manage their entire workflow from training to optimization without needing to switch platforms [13][14] - **Ecosystem Partnerships**: The company plans to partner with ecosystem suppliers to enhance its offerings without needing to own every component [14][15] Customer Base and Market Strategy - **Diverse Customer Segments**: Nebius intends to serve various market segments, with a focus on enterprises, which are expected to account for two-thirds of compute spending in the next three to five years [18][19] - **Anchor Customer**: Microsoft has signed a five-year agreement with Nebius worth up to $19 billion, utilizing Nebius's infrastructure for various business needs, including AI model development [20][21] Demand Environment - **Surge in Demand**: There has been a notable increase in demand for compute resources, with Nebius reporting a 70% quarter-on-quarter increase in pipeline production, generating $4 billion in the last quarter [24][25] - **Market Trends**: Startups and established companies are increasingly focusing on AI, leading to a broader range of use cases and a growing dependence on infrastructure [26] Financial Health and Capital Strategy - **Capital Raising**: Nebius has raised approximately $8.5 billion to date, enabling significant expansion and the establishment of multiple data center locations [40][41] - **Profitability Focus**: The company aims for EBITDA margins of 20%-30% in the medium term, with a focus on operational efficiency and cost management [45][46] Challenges and Bottlenecks - **Infrastructure Delivery**: The complexity of delivering infrastructure in a timely manner is a significant challenge, requiring careful project management and unique configurations [34][36] - **Market Concerns**: There are concerns about whether the current demand for AI infrastructure will sustain, especially in light of recent market corrections [27][39] Future Outlook - **Growth Projections**: Nebius expects to scale its annual recurring revenue (ARR) significantly by 2026, leveraging its experienced team and operational efficiencies [46] - **Long-Term Vision**: The company is committed to expanding its capabilities and customer base while maintaining a disciplined approach to capital management and profitability [44][47] Additional Insights - **AI-First Transition**: Many companies are transitioning to AI-first strategies, indicating a broader market shift that Nebius is well-positioned to capitalize on [26] - **Emerging Use Cases**: The expansion of AI applications beyond traditional models to include voice, video, and imagery is driving demand for Nebius's infrastructure [26]

Group 1 - Nebius Group N.V. (NBIS) has experienced increased volatility recently due to a reassessment of the AI trade, leading to investor speculation about potential entry points [1] - The analysis suggests a bullish outlook on NBIS, while also advocating for a more cautious approach to investment decisions [1] - The investment strategy focuses on identifying undervalued companies with strong balance sheets and management teams, particularly in sectors with long-term growth potential [1] Group 2 - The leader of the investing group Best Of Breed Growth Stocks emphasizes the importance of combining growth-oriented principles with strict valuation criteria to enhance investment safety [1] - The investment group offers exclusive access to high-conviction stock picks, comprehensive research reports, real-time trade alerts, and macro market analysis [1]

Core Insights - Nebius has experienced a significant increase in stock price, rising over 200% this year, indicating strong market performance and investor interest [1] Company Performance - The stock price of Nebius (NBIS) was reported at 3.90% on November 28, 2025, reflecting its current valuation and market position [1] Future Outlook - The commentary suggests that the best performance for Nebius is anticipated to come in the future, indicating potential for further growth and investment opportunities [1]