Core Viewpoint - There are increasing warning signs of a potential financial bubble in the artificial intelligence sector, with notable figures like Jeff Bezos expressing concerns about the challenges in distinguishing between viable and non-viable AI investments [1][2][3]. Investment Trends - Jeff Bezos has made significant investments in AI, including a $72 million investment in Toloka and participation in a $400 million funding round for Physical Intelligence, indicating strong interest in the sector despite the looming bubble concerns [1][2]. Market Sentiment - The Bank of England and the International Monetary Fund have echoed Bezos' concerns, suggesting that the current excitement around AI may lead to a mispricing of risks in the market, potentially resulting in a sudden market correction [3][5]. Valuation Concerns - AI investments have reportedly inflated equity valuations to levels comparable to the peak of the dotcom bubble, raising alarms about the potential for a devastating market correction if prices adjust [5][6]. Regulatory Perspectives - While the Federal Reserve in the U.S. does not currently see signs of a financial bubble, other international banks are more cautious, highlighting the risks associated with the AI investment landscape [4].

Group 1 - Nebius Group is currently the top-performing large-cap AI stock in 2025, with a year-to-date gain of over 350% [2] - The company focuses on AI infrastructure and operates seven large-scale GPU clusters across Europe, the U.S., and the Middle East [3] - Nebius Group serves notable clients such as Cloudflare and Shopify, along with various AI start-ups [4] Group 2 - In addition to AI infrastructure, Nebius has subsidiaries that develop autonomous driving technology and an online education platform for technology workers [5] - The company holds equity stakes in Toloka, which provides curated data for AI, and ClickHouse, which offers an open-source database management platform [6] - Nebius is positioned as an early entrant in a rapidly growing market, with CEO Arkady Volozh highlighting its technological expertise and scale [8]

Core Insights - The current excitement around artificial intelligence has led to inflated valuations, reminiscent of the dot-com bubble and the biotech bubble of the 1990s [4][6][9] - Jeff Bezos acknowledges the challenges investors face in distinguishing between viable and non-viable AI ventures during this period of enthusiasm [6][7] - Despite potential risks, Bezos remains optimistic about the long-term technological advancements that may arise from the current AI investments, even if many companies fail [9] Investment Trends - Companies have invested hundreds of billions of dollars in artificial intelligence, indicating a significant influx of capital into the sector [4] - Bezos Expeditions, Jeff Bezos' family office, invested $72 million in AI company Toloka and participated in a $400 million funding round for robot startup Physical Intelligence [4][5] Market Dynamics - The Nasdaq's historical performance during the dot-com bubble serves as a cautionary tale, with a peak increase of 86% in 1999 followed by a 77% decline by October 2002 [2] - Bezos compares the current AI landscape to past bubbles, suggesting that while many investors may incur losses, the technological progress could yield substantial benefits [9]

Financial Data and Key Metrics Changes - The company reported revenue of $105.1 million, representing a 625% year-over-year increase and a 106% quarter-over-quarter increase, driven by strong performance in the core business [11] - The annualized run rate revenue guidance was raised from $700 million to a new range of $900 million to $1.1 billion, reflecting strong demand and capacity expansion [4][13] - The company achieved positive adjusted EBITDA in its core AI infrastructure business ahead of expectations [3][20] Business Line Data and Key Metrics Changes - AI cloud infrastructure revenue increased more than nine times year-over-year, driven by strong customer demand for corporate GPUs and near-peak utilization of the platform [11] - The company expects to have 220 megawatts of connected power by the end of the year, with 100 megawatts of active power [13] Market Data and Key Metrics Changes - The company is expanding its customer base significantly, adding large global technology customers such as Cloudflare, Process, and Shopify, while also maintaining a strong position with AI tech startups [6] - The demand for AI compute is expected to remain strong, with the company planning to secure over one gigawatt of power by 2026 to capture industry growth [5][8] Company Strategy and Development Direction - The company is aggressively ramping up data center capacity and enhancing its software cloud platform to support expanding capacity and meet demand [5][6] - The focus is on becoming a leader in AI cloud infrastructure, with significant investments planned to capture growth opportunities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for AI compute and the company's ability to scale operations effectively [8][12] - The company anticipates turning adjusted EBITDA positive at the group level by the end of the year, with expectations for continued growth in 2026 and beyond [20][12] Other Important Information - The company has raised over $4 billion in capital and has access to potentially billions more through non-core businesses and equity stakes [7] - The company is maintaining its capital expenditure guidance of around $2 billion for 2025 [15] Q&A Session Summary Question: What does the overall demand environment look like as we move into the second half of the year? - The demand environment in Q2 was very strong, with peak utilization achieved by the end of the quarter, indicating growing opportunities in the market [17][19] Question: How should we think about adjusted EBITDA for the core business and the whole group going forward? - The core business is expected to remain positive throughout the year, while group adjusted EBITDA is anticipated to turn positive by the end of the year but will remain negative for the full year [20] Question: Can you provide an update on ARR for the year? - ARR grew from $249 million in March to $430 million in June, with strong momentum continuing into July [21] Question: How should we think about revenue for next year with the one gigawatt of contracted power? - It is too early to provide 2026 guidance, but the company reaffirms its midterm outlook for several billion dollars in revenue [26] Question: How do tariffs impact your business and margins? - The impact of tariffs is still being assessed, but the company is confident that the market will balance out any short-term fluctuations [28] Question: What is the expected return on CapEx? - The company expects to break even on the hopper generation in roughly two to three years, with potential for a shorter return on invested capital as software and services revenue scales [30][32] Question: What is the timeline for the infrastructure build-out for this year? - The company is ramping up capacity with significant projects in New Jersey and Finland, expecting to have 220 megawatts of connected power by the end of the year [34][35] Question: How do you plan to finance the capacity expansion for this year and next year? - The company has significant cash on hand and will approach additional capital raising opportunistically based on market conditions [45] Question: What partnerships do you think are most meaningful? - The company has made strong progress with partnerships, including integrations with Mistral and Base 10, which extend the ease of use of its AI cloud [66] Question: How is NVIDIA Leptin impacting your business? - The partnership with NVIDIA has generated a significant pipeline of customers, enhancing the company's position in the AI ecosystem [82] Question: Do you expect to benefit from Europe's ramp-up in AI investments? - The company is well-connected in Europe and expects to be a major AI infrastructure builder in the region [84]

Nebius Group NV NBIS might be the most underappreciated player in AI infrastructure today. At a $12 billion market cap, it's trading like a mid-cap growth story.Billions In Plain Sight — Still IgnoredBut a closer look by Ng Investing on X revealed the company is sitting on $3.7 to $5.7 billion worth of subsidiaries — hidden in plain sight, yet not fully priced in by the market.Take ClickHouse: Nebius owns 28% of the open-source database firm, last valued at $6 billion. That alone is worth $1.68 billion. Add ...

Group 1 - The Federal Reserve held interest rates steady, noting increasing uncertainty and risks of slow growth and rising prices [1] - Shares of Nebius Group soared nearly 10% following a significant investment announcement [1] - Nebius Group emerged from the restructuring of Yandex and consists of a core AI infrastructure business and three additional holdings [3] Group 2 - Jeff Bezos' private investment office, Bezos Expeditions, led a $72 million strategic investment in Toloka, a data partner for AI development [4][5] - The investment will allow Toloka to pursue its strategic direction while Nebius retains a significant majority economic stake [5] - Toloka partners with major technology companies, including Amazon and Shopify, and is expected to enter a new growth phase [6]