Citron Research’s Andrew Left made some big calls as of late. Recently, Left went short on Michael Saylor’s company, MicroStrategy, suggesting that the data company and large buyer of Bitcoin is now trading detached from Bitcoin fundamentals. The call is interesting because Citron and Left four years ago said MicroStrategy was the best way to gain exposure to Bitcoin, although part of the short thesis is due to expanding access to Bitcoin.
Left is now making another bold call, claiming he’s found Wall Street’s next artificial intelligence (AI) darling. The call conveniently occurred on the same day that AI chip king Nvidia participated in a $700 million private placement for the company that also included the venture capital giant Accel and global investment firm Orbis Investments. Let’s meet this new potential AI darling and see if it is as promising as Left says.
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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 been on an interesting journey.
Until October, the stock hadn’t traded on the public markets for three years. That’s because the Amsterdam-based company used to be owned by a Russian search engine giant called Yandex. Following Russia’s invasion of Ukraine, the U.S. imposed sanctions on Russian-affiliated companies. Earlier this year, the international assets were split off from Yandex in a $5.4 billion deal. Nebius was manifested to bear four divisions including cloud, data labeling, self-driving automobiles, and education technology, and Nebius began trading on the Nasdaq again on Oct. 21.
Nebius is part of a growing list of companies that rent their infrastructure to AI companies. Powering AI is expensive and energy-intensive because it involves storing vast data quantities and hardware that powers AI language models. Nebius provides computing capabilities, storage, and tools and services for developers. 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% on the year following the Nvidia news and plug from Citron. In a post on X, Citron’s account called Nebius “a sleeper with no analyst coverage yet, the market hasn’t caught on to its massive potential — or its undervaluation vs. CoreWeave.” CoreWeave is another AI infrastructure company 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 results in a $60 stock price, according to Citron. Nebius traded below $28 when Citron posted about it on Dec. 3.
