Mike Does Finance

I love AI agents, please be my friend. Don't hurt me.

[Mike Does Finance @MikeDoesFinance]

Amazon controls what we buy,
Meta controls what we see,
Google controls everything in between

[Mike Does Finance @MikeDoesFinance]

@konstructivizm Is this black and blue or white and gold

[Mike Does Finance @MikeDoesFinance]

@andrewoetting @MindMatter28 Was literally going to say this haha.

[Mike Does Finance @MikeDoesFinance]

As an investor it is equally, if not more, important to understand how the underlying businesses that you follow can fail to deliver at the level of expectations. This is a great layout on what could potentially go wrong with $NBIS.

[Northwise Project @InvestNorthwise]

What would break our $NBIS thesis?

Not every investment goes perfectly as planned. Businesses operate in the real world. Our research has identified 8 items that could potentially break our thesis (seen below). For details check out our model!

[Mike Does Finance @MikeDoesFinance]

@InvestNorthwise Great content!

[Mike Does Finance @MikeDoesFinance]

Just when I thought about selling out if $NBIS this drops. Now I might buy more 👀

[Northwise Project @InvestNorthwise]

https://t.co/sobWJwWOKs

[Northwise Project @InvestNorthwise]

Our full $NBIS model is officially here!

Check out the full report in the first comment.

Since our first model Nebius received a significant $NVDA investment, a very underrated $META backstop as a financing lynchpin, and is nearing the 20 site mark globally.

We continue to build our Nebius model from the ground up using a site by site energization method that we now have visibility to run out through 2030.

Thanks to interviews and events with @daniel_koss @mvcinvesting @romanchernin Tom Blackwell and many other Nebius members and contributors, we gained immense insight into how Nebius continues to execute faster that even our aggressive bull case could image.

While we were directionally correct that mix shift would continue to weigh more towards ai cloud contracts with enterprise and ai natives through the end of the decade, we couldn't imagine that it would be near achieved in 2026.

Our 2030 Base case below illustrates just how forward our expectations for growth have shifted at this rate of execution.

Capacity — Connected MW (base case)
2026: 905
2027: 2,142
2028: 3,964
2029: 4,646
2030: 5,200

Undisclosed data center expansion bucket — Connected MW (base case)
2027: 175
2028: 425
2029: 600
2030: 739

ARR per MW (M, base case)
2026: 9.9
2027: 11.3
2028: 12.8
2029: 13.8
2030: 14.5

Exit ARR (B, base case)
2026: 9.0
2027: 24.2
2028: 50.7
2029: 64.1
2030: 75.4

Recognized revenue (B, base case)
2026: 3.4
2027: 15.8
2028: 36.1
2029: 58.1
2030: 70.3

Gross CapEx (B, base case)
2026: 25.0
2027: 39.4
2028: 59.6
2029: 26.2
2030: 25.2

Cumulative 2026–2030: ~$175B

Funding assumptions (base case)

1. Prepayments, % of CapEx: 55%
2. Core OCF, % of EBITDA: 70%
3. External gap, debt/equity: 85/15
4. Blended interest cost: 5.5%

Funding outcomes (B, cumulative 2026–2030, base case)

1. Prepayments: ~95
2. Core OCF ex-prepayments: ~49
3. Debt raised: ~34
4. Equity raised: ~6
5. Ending debt: ~43
6. Ending cash: ~20

Adjusted EBITDA margin (base case)
2026: 40%
2027: 42%
2028: 44%
2029: 45%
2030: 45%

Implied 2030 adj. EBITDA: ~$32B

D&A (B, base case)
2026: 2.9
2027: 8.1
2028: 16.2
2029: 23.1
2030: 27.3

Share count (base case)

Ending diluted shares: ~339M

Base case scenario probability weight: 55%

Thank you to our premium members for your massive support in bringing this refresh so quickly.

Price targets, our portfolio allocation, present value calculations, and our buy/hold/trim/sell zones are now live.

[Mike Does Finance @MikeDoesFinance]

@TopTechStocksUS Love this place so much

[Mike Does Finance @MikeDoesFinance]

@TopTechStocksUS You in riviera maya?

[Mike Does Finance @MikeDoesFinance]

@andrewmccalip Congrats on escaping the rat race

[Mike Does Finance @MikeDoesFinance]

$/token was the metric.
It’ll become $/task.

Token efficiency and task efficiency are equally important.

[Mike Does Finance @MikeDoesFinance]

@SStricklandMMA Yes, this is what Dana said

[Mike Does Finance @MikeDoesFinance]

@InvestNorthwise Would be cool to show Wall Street targets when you released this

[Mike Does Finance @MikeDoesFinance]

Not only is $NU a great company, but I also think it’s trading at a very attractive valuation.

[Northwise Project @InvestNorthwise]

$NU is not being modeled off the same base anymore.

That is the point.

The old Nubank forecast was not structurally wrong. The framework still works: customers, ARPAC, margins, credit quality, share count, and valuation. But the operating base has changed enough that the model has to move.

FY2025 closed with $16.3B of revenue and $2.9B of net income.

Then Q1 2026 reset the forward trajectory.

Revenue crossed $5B in a single quarter for the first time. Net income reached $871M. ROE was 29%. ARPAC moved to roughly $16. Customers passed 135M.

That is a very different starting line than the market seems willing to acknowledge.

The stock is still being treated like a Latin American growth financial that deserves a heavy Brazil discount, a credit discount, an FX discount, and a multiple discount. Some of that is fair. Nubank earns in local currencies, reports in dollars, and is expanding credit in markets where macro can punish arrogance very quickly.

But valuation discounts should not blind investors to operating progress.

This is now a company producing more than $20B of annualized revenue, nearly $3.5B of annualized net income off Q1, and high-twenties ROE while Mexico has already reached break-even.

That last point matters.

The prior debate around Mexico was whether Nubank could eventually replicate Brazil. Q1 2026 moved that question forward. Mexico now has more than 15M customers, became the third-largest financial institution in the country by customers, and reached break-even much earlier than expected.

That does not mean Mexico is Brazil 2.0 yet.

It means the burden of proof has shifted.

The business no longer needs investors to underwrite a distant international dream with no operating evidence. It has a live proof point showing that the model can travel, scale, and begin converting into economics outside Brazil.

Colombia adds another layer. It is smaller, but 5M customers and more than COP 10T in deposits are enough to show this is not just a one-country story with a Mexico marketing slide attached.

Still, the upgraded base year also creates a tougher standard.

When revenue, net income, and ARPAC move higher, investors should raise expectations. Nubank now has to prove that the higher earnings base is durable, not just the product of favorable mix, credit expansion, and strong near-term monetization.

That is where the risk side comes in.

The credit portfolio reached $37.2B in Q1 2026. The loan-to-deposit ratio rose to 58.3%. The 15 to 90 day NPL ratio increased to 5.0%. Credit-loss allowances rose sharply quarter over quarter. Risk-adjusted net interest margin declined.

This is the part of the story that deserves real attention.

Nubank’s operating base has reset upward.

So has the need for discipline.

A higher revenue base is valuable only if the credit quality behind it holds. A higher ARPAC number is valuable only if it reflects durable relationship depth, not hidden risk accumulation. A stronger Mexico trajectory is valuable only if the economics survive beyond the first break-even milestone.

That is why $NU is such an interesting setup.

The market sees Brazil risk, FX risk, credit risk, and emerging-market financial volatility.

It is not wrong to see those things.

The question is whether the market is over-discounting them against a business that now has 135M+ customers, a Q1 revenue run-rate above $20B, 29% ROE, Mexico break-even, structurally low cost to serve, and expanding product density across three countries.

This is the new base year.

A stronger base.

A higher trajectory.

A more demanding test.

The model has reset upward, but the investment case still has to be earned through credit discipline.

[Mike Does Finance @MikeDoesFinance]

@InvestNorthwise I’m super bullish on NU

[Northwise Project @InvestNorthwise]

In February, we released our first full $NBIS model to X with and set a staggering $1,250 end of 2029 price target ($644 present value @ 18% discount rate) for our premium members.

We have decided to open our full model for free this week. (link in first comment)

Although all of our reports are free for readers, our price targets, portfolio allocations, present value calculations, and buy/hold/trim/sell zones are generally gated.

Before we release our new $NBIS model next week, we have decided to open up our most popular model to date for everyone on the X community who has supported our work on $NBIS and many other names in AI infra.

We appreciated you and hope you gain something on the way we think, what we got right, and more importantly what we got wrong.

It's not easy to set a target so high with confidence when Nebius was trading under 100 a share at the time, but it's much easier when you put in the work, do the research, and actually base price targets on real numbers.

The original report was published when most public analysis still treated Nebius as a GPU rental business.

Our report instead modeled the company around power availability, connected MW, ARR per MW, utilization, customer funding, enterprise mix, and dilution.

Several parts of that framework were correct.

We correctly identified Nebius as a vertically integrated AI infrastructure platform rather than a simple reseller of GPU capacity.

We correctly identified power and energization as the primary operating constraints.

We correctly modeled revenue as a function of connected and monetized MW rather than applying a simple revenue growth rate.

We correctly treated hyperscaler contracts as both revenue sources and financing instruments.

We correctly identified customer prepayments, deferred revenue, operating cash flow, secured financing, and asset-backed financing as central components of the capital stack.

We correctly identified Aether and the broader software layer as important to utilization, orchestration, customer integration, and long-term margin quality.

We correctly expected enterprise, AI-native, and inference workloads to become more important over time.

We correctly argued that equity outcomes would differ significantly across AI infrastructure companies depending on power control, capital structure, dilution, depreciation, and software integration.

We were materially above most public and Wall Street valuation estimates. Our original public model included:

Bear case: $752

Base case: $1246

Bull case: $1760

Those estimates were based on long-term infrastructure throughput and earnings power rather than near-term revenue alone.

Several assumptions now appear too conservative.

ARR per MW may be ramping faster than we expected.

The original model assumed ARR per MW would increase gradually as rack density improved, utilization rose, and enterprise and inference mix expanded.

Our modeled midpoint assumptions were:

2026: $9M per MW

2027: $11M per MW

2028: $13M per MW

2029: $15M per MW

The current revenue and ARR trajectory suggests the starting point and slope may both need to move higher.

Contracted power has expanded faster than expected.

The original report assumed more than 3GW of contracted power by the end of 2026.

The disclosed pipeline has since expanded beyond that level, increasing the potential long-term capacity base.

Contracted power is not the same as energized capacity, but it increases the top of the future deployment funnel.

The energization schedule may have been too conservative.

The old model assumed approximately:

2026: 900 connected MW

2027: 1,500 connected MW

2028: 2,000 connected MW

2029: 2,650 connected MW

That schedule already appeared aggressive at publication.

New site announcements, construction progress, and disclosed capacity targets suggest the ramp may occur faster or reach a larger endpoint than our original base case.

Customer funding appears stronger than expected.

The original model assumed that prepayments and contract-related cash flow would fund a meaningful portion of the buildout.

The increase in deferred revenue and operating cash flow suggests that customer commitments may be contributing more funding, and contributing it earlier, than our original assumptions.

We will distinguish carefully between deferred revenue, cash prepayments, working capital movements, and operating cash flow in the update.

Enterprise and AI-native mix may be ahead of our original assumptions.

The old model assumed the following revenue mix:

2026: 85% hyperscaler, 15% cloud and enterprise

2027: 80% hyperscaler, 20% cloud and enterprise

2028: 72% hyperscaler, 28% cloud and enterprise

2029: 65% hyperscaler, 35% cloud and enterprise

Current customer activity and product development suggest enterprise, inference, healthcare, life sciences, and AI-native workloads may be scaling faster than this path assumed.

The capital structure has become more complex.

The old model used scenario-based equity issuance assumptions.

The updated model must now include:

Basic share count

Prefunded warrants

Convertible notes

Potential conversion dilution

Interest expense

Cash raised

Customer funding

Secured financing

Asset-backed financing

The old share-count framework is no longer detailed enough.

CapEx will need to move higher.

The original model used approximately $18B as the midpoint of 2026 CapEx.

A larger contracted power base and faster site development may require higher spending.

Higher CapEx can increase long-term value if the capacity is efficiently funded and monetized. It can also increase execution and financing risk. The update will evaluate both sides.

The original report correctly identified the structure of the opportunity and was materially ahead of the market on valuation.

The new report will update the assumptions where Nebius has moved faster than expected and add greater precision where the original model relied on incomplete information.

[Mike Does Finance @MikeDoesFinance]

@DavidBCollum What do you think it’s FCF will be in the next 12 months?

[Mike Does Finance @MikeDoesFinance]

How many sub-$25k accounts will blow up today? A lot.

[Northwise Project @InvestNorthwise]

Taking a very serious look at $CELH today.

Looking like a very interesting opportunity at this price. Currently deep into a full 2030 model and forecast.

Check out our free newsletter in the first comment if you'd like to receive the full report before it lands on X.

[Mike Does Finance @MikeDoesFinance]

People who work will work less days or less hours or retire earlier or make a lot more as the opportunity cost of not working will be increasingly large

[Mike Does Finance @MikeDoesFinance]

Ai will be deflationary, so much so that the market will collapse due to it’s success.

Multiples will shrink as required rates of return increase because the cost of goods will trend towards zero and people will require more to justify investing their money.

[Mike Does Finance @MikeDoesFinance]

Probably have ~ 2 years as the physical world needs to catch up. We will have unbeforeseen growth paired with mass unemployment leading up to it, then UBI, then deflation blah blah.