Key Takeaways IREN is shifting from crypto mining to AI cloud services with major infrastructure plans.The company is building multi-GW capacity, backed by Microsoft deals and customer prepayments.IREN faces high capex and competition as it converts sites and expands AI data-center capabilities.IREN Limited (IREN) is transitioning from a pure-play crypto-mining company to an AI cloud service provider. This shift from its core crypto mining business will ensure that IREN capitalizes on the growing AI compute ...

The under the radar shift the market has generally ignored is Rumble Inc. ( RUM ) transitioning to an AI cloud provider. The video-sharing platform remains stuck in neutral, but big plans with Tether might change the equation. My investmentStone Fox Capital is an RIA from Oklahoma. Mark Holder is a CPA with degrees in Accounting and Finance. He is also Series 65 licensed and has 30 years of investing experience, including 15 years as a portfolio manager. Mark leads the investing group Out Fox The Street whe ...

Financial Data and Key Metrics Changes - Revenue for Q1 FY26 reached $240 million, representing a 28% increase quarter over quarter and a 355% increase year over year [18] - Adjusted EBITDA was $92 million, reflecting continued margin strength despite higher payroll tax expenses [18][19] - Operating expenses increased primarily due to higher depreciation and SG&A expenses, with $63 million attributed to unrealized gains on financial instruments [18][19] Business Line Data and Key Metrics Changes - The company announced a significant $9.7 billion AI cloud contract with Microsoft, expected to generate approximately $1.94 billion in annual recurring revenue [6][7] - The expansion plan includes scaling the GPU fleet from 23,000 to 140,000 GPUs by the end of 2026, which is projected to support an annualized run rate revenue of approximately $3.4 billion [8][10] Market Data and Key Metrics Changes - The demand for AI cloud services is increasing, with strong interest from various customer segments, including hyperscalers and AI enterprises [51][52] - The company is experiencing robust pricing dynamics in the cloud market, with expectations of rising pricing per GPU hour [44][50] Company Strategy and Development Direction - The company is focused on vertical integration, controlling the entire stack from power generation to GPU deployment, which is seen as a key competitive advantage [9][10] - Future expansions will leverage existing data centers to maintain capital efficiency while meeting growing customer demand [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on the Microsoft contract and highlighted the strategic value of the partnership [19][20] - The company is optimistic about future growth opportunities, with plans to monetize substantial power and land capacity available [101] Other Important Information - The company has secured $1 billion in zero-coupon convertible notes and an additional $200 million in GPU financing to support its expansion [23] - The construction of data centers is designed to meet hyperscale requirements, ensuring long-term operational efficiency and reliability [13][14] Q&A Session Summary Question: Can you expand on the strategic value of the Microsoft deal? - Management highlighted the validation of their proprietary data center design and the ability to service a major technology company as significant strategic value [28][29] Question: What is the expected return profile of the Microsoft deal? - The unlevered IRR is expected to be in the low double digits, with a levered IRR potentially reaching 25-30% depending on financing structures [31][32] Question: How many GPUs will be deployed as part of the Microsoft deal? - Each phase of the Horizon project will accommodate 19,000 GPUs, with four phases planned [39] Question: What are the pricing dynamics in the cloud market? - There is a strong demand for GPU services, leading to increased pricing per GPU hour, with a focus on risk-adjusted returns [44][50] Question: What is the level of interest in the Sweetwater site? - There is strong interest across all sites, including Sweetwater, with discussions ongoing about various service offerings [55] Question: How does the company view risk in cloud deals versus colocation deals? - Management believes cloud deals present a better risk proposition compared to colocation, especially with the backing of a strong counterparty like Microsoft [82][84]

Financial Data and Key Metrics Changes - Revenue for Q1 FY26 reached $240 million, representing a 28% increase quarter over quarter and a 355% increase year over year [16] - Adjusted EBITDA was $92 million, reflecting continued margin strength despite higher payroll tax expenses of $33 million accrued in the quarter [16][17] - Operating expenses increased primarily due to higher depreciation and SG&A expenses, largely driven by a higher share price [16] Business Line Data and Key Metrics Changes - The company announced a significant $9.7 billion AI cloud contract with Microsoft, expected to generate approximately $1.94 billion in annual recurring revenue [5][17] - The expansion plan includes scaling the GPU fleet from 23,000 GPUs to 140,000 GPUs by the end of 2026, which is projected to support an annualized run rate revenue of approximately $3.4 billion [6][10] Market Data and Key Metrics Changes - The AI cloud services market is experiencing strong demand, with the company positioned as a strategic partner for major technology firms, including Microsoft [6][9] - The company is seeing increased demand for air-cooled variants of NVIDIA's GPUs, indicating robust market interest [10][33] Company Strategy and Development Direction - The company is focused on vertical integration, controlling the entire stack from power supply to GPU deployment, which is seen as a key differentiator in the AI cloud services market [7][8] - Future expansions will leverage existing data centers to maintain capital efficiency while accommodating growing customer demand [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of the Microsoft contract and the overall growth strategy, emphasizing the importance of maintaining a strong balance sheet and access to capital markets [20][21] - The company anticipates continued strong demand for its services, particularly in AI workloads, and is actively engaging with various customer segments [32][44] Other Important Information - The company has secured $1.8 billion in cash as of the end of October, which will support upcoming capital expenditures [20] - The design enhancements for data centers are aimed at ensuring long-term value protection and accommodating future generations of GPUs [12][30] Q&A Session Summary Question: Can you expand on the strategic value of the Microsoft deal? - The deal demonstrates the company's capability to service a major technology firm and validates its proprietary data center design, enhancing its market credibility [22][23] Question: What is the expected return profile of the Microsoft deal? - The unlevered IRR is expected to be in the low double digits, while the levered IRR could reach 25-30% depending on financing structures [24][25] Question: How is the company addressing GPU demand and future-proofing? - The design accommodates future generations of GPUs with higher rack densities, ensuring scalability and efficiency [29][30] Question: What is the level of interest in the Sweetwater site? - There is strong interest across all sites, including Sweetwater, with significant capacity available for future service offerings [35] Question: How does the company view risk in cloud deals versus colocation? - The company believes cloud deals present a better risk proposition compared to colocation, especially with the backing of a strong credit profile like Microsoft's [46][47] Question: What are the dynamics of pricing in the cloud market? - The company is experiencing increasing demand and pricing per GPU hour, indicating a robust market environment [31][32] Question: Can you provide an update on the contracting of GPUs in British Columbia? - The company has contracted 12,000 out of the initial 23,000 GPUs, with ongoing strong demand and late-stage discussions for the remaining capacity [43][44]

Core Insights - Nebius Group's stock experienced significant growth, rising over 25% in August and 64.3% in September, driven by a major contract with Microsoft [1][3][4] Company Developments - Nebius announced a $17.4 billion agreement with Microsoft to provide dedicated capacity for AI workloads from its New Jersey data center, effective for five years starting later this year [3][4] - The CEO of Nebius indicated that this deal is indicative of future contracts with leading AI labs and tech companies, highlighting the strong performance of its core AI cloud business [4] Analyst Sentiment - Analysts have responded positively to the Microsoft deal, with several firms raising their price targets significantly: BWS Financial increased its target to $130 from $90, DA Davidson to $125 from $75, and Northland to $206 from $77, reflecting a bullish outlook on Nebius stock [6][7][8] - Despite the stock's high valuation at 122 times sales, analysts suggest that the momentum may continue, although some investors may seek better buying opportunities elsewhere [6][9]

Group 1: Market Cap Insights - The exclusive $1 trillion market cap club includes notable companies like Berkshire Hathaway, the Magnificent Seven, and Broadcom [1] - Oracle and JPMorgan Chase are approaching the $1 trillion market cap, with Oracle at $787 billion and JPMorgan Chase at approximately $862 billion [2] Group 2: JPMorgan Chase Overview - JPMorgan Chase is recognized as a leading bank in the U.S., investing heavily in technology, particularly artificial intelligence, while maintaining a reputation as a stable institution [3] - The bank has a strong investment banking unit, consumer and commercial lending divisions, and a growing payments business, with its U.S. deposit market share increasing from over 7% in mid-2008 to nearly 11.8% as of June this year [4] - JPMorgan Chase is investing $18 billion annually in technology to enhance its banking services, targeting a 17% return on tangible common equity (ROTCE) through economic cycles [5] Group 3: Stock Performance - JPMorgan Chase's stock has appreciated over 48% in the past year and approximately 220% over the last five years, trading at a peer-leading three times tangible book value per share [6] Group 4: Oracle Overview - Oracle, a late entrant in the cloud business, is emerging as a significant player in the artificial intelligence cloud sector, leveraging its cloud infrastructure for AI advancements [9]

Core Viewpoints - CoreWeave (NASDAQ: CRWV) has announced a significant deal with Meta Platforms, which will provide the company with up to $14.2 billion by the end of 2031 for guaranteed AI computing capacity [1] - The company also secured a similar agreement with OpenAI and a revenue guarantee from Nvidia amounting to $6.3 billion, marking a successful month and a strong six months for CoreWeave investors, with stock prices increasing nearly 250% since its IPO in late March [2] Financial Performance - An investment of $10,000 in CoreWeave stock at the time of its IPO would now be worth approximately $34,200, reflecting a 242% gain through September 30 [4] Growth and Risks - CoreWeave is in a high-growth phase, but its expansion is heavily reliant on expensive debt, creating potential risks if the company cannot meet client demands or if AI demand decreases [5][7]

Core Point - AI cloud provider CoreWeave has expanded its partnership with OpenAI in a new deal worth up to $6.5 billion, increasing the total value of their agreements to $22.4 billion [1] Group 1 - The new deal with OpenAI signifies a strong commitment from CoreWeave to enhance its AI cloud services [1] - This partnership is part of a series of business expansions and collaborations in the AI sector, reflecting the growing demand for AI infrastructure [1] - The financial scale of the agreements indicates significant investment in AI technology and infrastructure development [1]

Core Insights - Larry Ellison, now serving as Oracle's CTO, has significantly contributed to the company's success in securing AI cloud contracts and transitioning away from traditional software solutions [1] Company Developments - Oracle is focusing on AI cloud services, leveraging Ellison's expertise to enhance its competitive position in the market [1] - The shift from legacy software to AI-driven solutions indicates a strategic pivot aimed at capturing new growth opportunities [1]