Citron Research’s Andrew Left has made some important decisions lately. Recently, Left went bankrupt in Michael Saylor’s company. MicroStrategyindicating that the data company and major customer of Bitcoin now trades separately from Bitcoin fundamentals. The call is interesting because Citron and Left said four years ago that MicroStrategy was the best way to gain exposure to Bitcoin, although part of the short thesis is due to expanding access to Bitcoin.
Now the left is making another bold call, claiming it has found Wall Street’s next darling in artificial intelligence (AI). The call conveniently took place on the same day that AI was chip king Nvidia participated in a $700 million private placement for the company, which also included venture capital giant Accel and global investment firm Orbis Investments. Let’s meet this new potential AI darling and see if it’s as promising as Left says.
Do you miss the morning spoon? Wake up with Breakfast news in your inbox every market day. Register for free »
Citron’s shoutout and Nvidia’s investment may have been the first time you heard of the AI ​​infrastructure company Nebius group (NASDAQ:NBIS). How is that possible? Well, Nebius has had an interesting journey.
Until October, the stock had not traded on public markets for three years. That’s because the Amsterdam company was previously owned by the Russian search engine giant Yandex. Following the Russian invasion of Ukraine, the US imposed sanctions on companies affiliated with Russia. Earlier this year, its international assets were spun off from Yandex in a $5.4 billion deal. Nebius was revealed to have four divisions, including cloud, data labeling, self-driving cars and education technology, and Nebius began trading again on the Nasdaq on October 21.
Nebius is part of a growing list of companies leasing their infrastructure to AI companies. Powering AI is expensive and energy-intensive because it involves storing large amounts of data and hardware that powers AI language models. Nebius provides computing capabilities, storage, and developer tools and services. The company’s core AI platform is intended to handle massive AI workloads. Companies looking to develop AI capabilities can pay a subscription to use the infrastructure offered by companies like Nebius.
It didn’t take long for investors to discover Nebius: the stock is up 55% year-over-year after the Nvidia news and Citron’s plug-in. In a post on X, Citron’s account called Nebius “a sleeper with no analyst coverage, the market hasn’t understood its enormous potential – or its undervaluation relative to CoreWeave.“CoreWeave is another AI infrastructure company that is rumored to be preparing a public offering that could value the company at $35 billion. If Nebius trades at a 50% discount to CoreWeave, that would result in a share price of $60. Nebius was trading below $28 when Citron reported on December 3.
