Nebius Group: Results From New Pricing Model Changed My Mind (Rating Upgrade)

Summary Nebius Group is upgraded to buy with rapid operating margin improvement and strong results of a new pricing model. NBIS nearly broke even on operating margin in FQ2, improving from a -32% loss in FQ1, driven by capacity additions and higher-margin revenue streams. In particular, the new auction-based and short-term pricing model could fundamentally improve unit economics. Besides generating higher prices (and margins), it could also boost unit yields and better sustain future capex projects. Looking for a helping hand in the market? Members of Envision Early Retirement get exclusive ideas and guidance to navigate any climate. Learn More » pichet_w/iStock via Getty Images Nebius Group: Updated pricing model and margins I last covered Nebius Group, Inc. ( NBIS ) on May 19 with an article titled “Nebius Group Q1 Earnings: Margin And Unearned Revenue In Focus.” That article rated the This article was written by Envision Research 20.97K Followers Follow Envision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.