The thesis

NBIS is a technology company developing infrastructure for the artificial intelligence industry. The company has achieved 621.5% year-over-year revenue growth, with a gross margin of 4791.0% and a net margin of 9527.0%. With a conviction score of 53/100, the setup is interesting due to the strong analyst consensus rating of BUY. The company's exposure to the AI theme is a key driver of its growth,

Why now

The current market force of AI buildout, driven by China's chip tool push and the US-China squeeze, makes this a compelling moment for NBIS. The company's position in the data centre layer of the Power, Grid & Nuclear story, with a direct beneficiary status to AI capital expenditure growth, adds to its timely appeal,

What to watch

Over the next quarter, watch for NBIS's revenue growth rate and gross margin performance to confirm the thesis. The company's ability to maintain its high growth rate and navigate the risks associated with power projects and the US-China chip tool squeeze will be key indicators of its success,

Key risks

The company's high P/E ratio of 65.7x and negative DCF intrinsic value of $-65 pose significant valuation risks. Delays, regulation, and rate decisions in power projects also pose execution risks, while the US-China squeeze on chip tools presents macro risks,

Theme exposure