Raza Zaidi

[Raza Zaidi @razazaidi58]

@GavinSBaker Think they kinda are because contract-level underwriting IRRs are either the same or higher than before

[Raza Zaidi @razazaidi58]

@AtlasShrug1 what is ur catalyst for this fall

[Raza Zaidi @razazaidi58]

@RHouseResearch 100% true, narrative just dominating price atm, but numbers will eventually show both price growth and margin expansion

[Raza Zaidi @razazaidi58]

@HiCagr Yes but u either need to have AC during the summer or some way to pass the hot air it releases out of your room

[Raza Zaidi @razazaidi58]

@stevehou Macquarie has a good note aswell

[Raza Zaidi @razazaidi58]

@CDMCapital @Lazarus_Capital Yep but thats reflected in the all-in capex cost per GPU during negotiations which is then used to agree the $/GPU rate for the contract that achieved the target margin. ROICs will always look bad at the start of capital deployment, ROIICS and equity IRR better indicators

[Raza Zaidi @razazaidi58]

@CDMCapital @Lazarus_Capital There is a degree of variability based on real-time movements but it is not contractually possible that you agree an all-in cost of $100k/gpu but end up paying $120k because of sudden last min px increases on the same rental rate

[Raza Zaidi @razazaidi58]

@Lazarus_Capital @CDMCapital Yes i completely agree with you that the nearly all your costs, i.e., GPU, networking, storage, NVlink etc. is locked, agreed and signed on that basis (i.e., thats why you achieve your contribution margin). The only variable element that i was referring was O&M / maintenance

[Raza Zaidi @razazaidi58]

@WaterworldCapi1 what do the different colors represent

[Raza Zaidi @razazaidi58]

@CDMCapital @Lazarus_Capital They do not build “spec” DCs nor bear risk of inflation as the rate plus pass-throughs are agreed with the customer when contracts are negotiated. They donot build out facilities post-contract but before and would spend more capex only against signed contracts.

[Raza Zaidi @razazaidi58]

@CDMCapital @Lazarus_Capital Can you explain what cost inflation are you talking about as power & colo are the main expense, with power being a full pass-through? Cash expense for GPUs is also funded through a mix of customer prepayments and debt so unsure what the timing mismatch is?

[Raza Zaidi @razazaidi58]

@bonjae3 @RealJimChanos @AJManaseer Comprehensive and to the point but few will understand this or choose to accept it.

[Raza Zaidi @razazaidi58]

@RealJimChanos @AJManaseer Connected power and billing MWs are two different things. YE ARR/connected MW is not the denominator for billing MW, which lags connected by a quarter or two

[Raza Zaidi @razazaidi58]

@RealJimChanos @AJManaseer Lol nothing to do with faith just GPU rental rates. You need c.550-600MW billing capacity to achieve YE target. What is your actual question?

[Raza Zaidi @razazaidi58]

@Sumiaga167401 @RealJimChanos @AJManaseer CFs come when MWs come online, which you saw in Q2 results. Ofc new supply will come online when a sector is earning 30-50% IRRs. It is your view on the demand curve in the next 8 quarters that matters.

[Raza Zaidi @razazaidi58]

@RealJimChanos @AJManaseer Obviously the billing MWs and share of spot compute is small during the start of the deployment phase? It is about what the incremental capacity gets brought online at. Any asset is the NPV of its CFs and if you keep comparing accounting profits you will never price it correctly

[Raza Zaidi @razazaidi58]

@RealJimChanos @AJManaseer They are making a lot of money short-term rentals? NBIS $/MW disclosed translates to pricing b/w $10-12/GPU/hr thats 2-3x LT price.

[Raza Zaidi @razazaidi58]

@AlexZzzzzzzza Key thing is also this debt is secured against customer contracts that fully amortise till end of contract life. Therefore, rn you are in peak interest and low equity yield. As you paydown debt (mandatory) not only does your interest exp come down but equity CF generation rises!

[Raza Zaidi @razazaidi58]

@RJCcapital U should look at EV not market cap if comparing size