Not Another Quant

Paul | Bitcoin, Crypto & Equities | Macro | Charts & On-Chain | NFA | 🇨🇦

[Not Another Quant @notanotherquant]

I think one of the reasons $NBIS is dumping is because they need a lot more money next year than was expected and they haven’t announced most of the loans for it yet. Before this earnings the market didn’t know that 2027 capex would be $40B to $45B (expected was ~$29B). And all that extra spending gets them about the same 2027 revenue analysts already expected.

Nebius says prepayments and loans backed by customer contracts will pay for 75% to 85% of it. Those prepayments are expected to get them $17B to $20B. The loans have to bring in the rest which is about $10B to $21B.

They have more than $40B of contracts with companies like $MSFT and $META to borrow against. But so far they have only announced one of those loans and it was $775M.

If they can’t get more of them they may have to use their cash, get more money upfront from customers, sell more shares, borrow some other way or build slower.

[Not Another Quant @notanotherquant]

$NBIS can get customers to pay for more of their buildout but they would have to give up some of their higher priced deals to do it.

Higher spending means Nebius needs more money. The delays mean some of the new equipment starts making money later than they planned for.

Customers paying more upfront helps pay for the buildout so Nebius doesn’t have to borrow as much or sell as many shares.

If borrowing gets too expensive they can sell more of their compute on longer contracts and have customers pay upfront. But that means having less for shorter deals and those can go for more than twice the price.

[Not Another Quant @notanotherquant]

I think one of the reasons $NBIS is dumping is because they need a lot more money next year than was expected and they haven’t announced most of the loans for it yet. Before this earnings the market didn’t know that 2027 capex would be $40B to $45B (expected was ~$29B). And all that extra spending gets them about the same 2027 revenue analysts already expected.

Nebius says prepayments and loans backed by customer contracts will pay for 75% to 85% of it. Those prepayments are expected to get them $17B to $20B. The loans have to bring in the rest which is about $10B to $21B.

They have more than $40B of contracts with companies like $MSFT and $META to borrow against. But so far they have only announced one of those loans and it was $775M.

If they can’t get more of them they may have to use their cash, get more money upfront from customers, sell more shares, borrow some other way or build slower.

[Not Another Quant @notanotherquant]

@wallstnomads

[Not Another Quant @notanotherquant]

@MatthewSpositi @PenneyInvests @BrandonWealth @Stealthct_Storm @JohnProv1 @CaffeineCraig @ElijahColeman21 @dissectmarkets @c4pappi @LazaroInvestor @sebiisb @ZenoReport You are the legend Matthew!

[Not Another Quant @notanotherquant]

@Mr_Derivatives Binders full of women… oh wait

[Not Another Quant @notanotherquant]

@Brownmoose What is the line at? Over under how many 😁

[Not Another Quant @notanotherquant]

$NBIS can get customers to pay for more of their buildout but they would have to give up some of their higher priced deals to do it.

Higher spending means Nebius needs more money. The delays mean some of the new equipment starts making money later than they planned for.

Customers paying more upfront helps pay for the buildout so Nebius doesn’t have to borrow as much or sell as many shares.

If borrowing gets too expensive they can sell more of their compute on longer contracts and have customers pay upfront. But that means having less for shorter deals and those can go for more than twice the price.

[Not Another Quant @notanotherquant]

@Spybef0rey0ubuy 🫡🫡🫡

[Not Another Quant @notanotherquant]

$NBIS can get customers to pay for more of their buildout but they would have to give up some of their higher priced deals to do it.

Higher spending means Nebius needs more money. The delays mean some of the new equipment starts making money later than they planned for.

Customers paying more upfront helps pay for the buildout so Nebius doesn’t have to borrow as much or sell as many shares.

If borrowing gets too expensive they can sell more of their compute on longer contracts and have customers pay upfront. But that means having less for shorter deals and those can go for more than twice the price.

[Not Another Quant @notanotherquant]

@MWi_EW Bessent will lose it if they don’t imo

[Not Another Quant @notanotherquant]

Japan needs to hike. But Japan continues with the mixed messaging today with a BoJ board member saying he doesn’t want to rush into hikes because of growth concerns.

In September they said more hikes were coming and USDJPY dropped from 160 to 153. Then they hiked with weak guidance and now it is right back at 160. I think they had an opportunity in October to hike when the Fed paused but Japan decided to pause as well.

They need to hike because the Fed odds say the Fed will hike. If they pause again and the Fed hikes (potentially up to 50bps) then the difference with US rates gets even wider. That means more traders borrow cheap yen to buy higher paying dollars in the carry trade and USDJPY goes past 160.

Then all the recent interventions are for nothing and Japan is forced to intervene again. That would make no sense. Bessent’s entire point is for Japan to get ahead of this.

[Not Another Quant @notanotherquant]

USDJPY back near 160. Remember Japan and the US want this to go lower. Japan is still worried about hiking rates too fast and now the Fed odds are showing a 25bps hike priced in for December with 50bps the next most likely. (87.1% to 12.9%)

This now makes another intervention by the MoF and potentially Bessent more likely. Some of this is out of their control but Japan has shown continued mixed guidance in the past.

Japan had the opportunity to hike in October when the Fed paused. Japan is worried about higher rates slowing growth, but a weak yen pushes import prices and inflation up and that hurts growth.

If they wait until they are forced into a big hike or another intervention, the yen jumps and the carry trade could unwind fast. That’s what happened in August 2024 which helped cause the quick global selloff.

[Not Another Quant @notanotherquant]

@StokPix It is. Ideally the Fed would be cutting while Japan could hold or hike less aggressive but that’s not the current situation.

[Not Another Quant @notanotherquant]

@Tape_Vector You are a legend!

[Not Another Quant @notanotherquant]

@Tape_Vector Excellent post sir 😎

[Not Another Quant @notanotherquant]

@Mapago9 Yep putting pressure on the AI trade. Lots of questions and hot takes now!

[Not Another Quant @notanotherquant]

I think one of the reasons $NBIS is dumping is because they need a lot more money next year than was expected and they haven’t announced most of the loans for it yet. Before this earnings the market didn’t know that 2027 capex would be $40B to $45B (expected was ~$29B). And all that extra spending gets them about the same 2027 revenue analysts already expected.

Nebius says prepayments and loans backed by customer contracts will pay for 75% to 85% of it. Those prepayments are expected to get them $17B to $20B. The loans have to bring in the rest which is about $10B to $21B.

They have more than $40B of contracts with companies like $MSFT and $META to borrow against. But so far they have only announced one of those loans and it was $775M.

If they can’t get more of them they may have to use their cash, get more money upfront from customers, sell more shares, borrow some other way or build slower.

[Not Another Quant @notanotherquant]

$NBIS can get customers to pay for more of their buildout but they would have to give up some of their higher priced deals to do it.

Higher spending means Nebius needs more money. The delays mean some of the new equipment starts making money later than they planned for.

Customers paying more upfront helps pay for the buildout so Nebius doesn’t have to borrow as much or sell as many shares.

If borrowing gets too expensive they can sell more of their compute on longer contracts and have customers pay upfront. But that means having less for shorter deals and those can go for more than twice the price.

[Not Another Quant @notanotherquant]

@LazaroInvestor Decent bounce so far? Monitoring 😬😬

[Not Another Quant @notanotherquant]

@MWi_EW Don’t want the 200 week MA to break 😬

[Not Another Quant @notanotherquant]

@Brikka_trading Hodl Hodl

[Not Another Quant @notanotherquant]

@HunterAllen4 Sling sling sling

[Not Another Quant @notanotherquant]

@BrandonWealth Liquorball sandwich time

[Not Another Quant @notanotherquant]

@Stealthct_Storm Go back on vacation 😁

[Not Another Quant @notanotherquant]

@JIB71776093 So we knew it was going up but I think the market is surprised by how much.

[Not Another Quant @notanotherquant]

@JIB71776093 Everyone knew about the 1gw but consensus had 2027 capex way lower than this. And they are spending way more but expecting about the same 2027 revenue.