NBIS has a bright future but is a pass due to rich valuation and negative free cash flow projections.

All right. Now, coming in at um number two here, holding number two, uh we have a company that actually houses and runs much of Nvidia's own hardware, and that's in Nebia's Group, ticker symbol NBIS, which at about $330 million is still only worth half of 1% in the portfolio.

But Nvidia is clearly investing in this neo cloud operator for their giant high-performance data centers that get packed with Nvidia's latest GPUs. Which Nebia's then rents out all of that high computing power to other companies that need it, but don't have all the same infrastructure and expertise as Nebia's to run it, or sometimes even the software or platforms.

Well, given the AI revolution, where almost every large company in the world is trying to figure out new ways of integrating AI into their operations, well, demand for this compute is rising off the charts.

Well, last quarter, for example, Nebia's revenue soared by over 450% year-over-year. They're now sitting on an annualized revenue run rate of $3 billion. So, to make things even more interesting, Luminar also owns a bunch of other promising businesses that could potentially break out in the future, like an autonomous driving company called AV Ride that is already doing robot deliveries with Uber Eats, an EdTech platform called TripleTen that is rapidly expanding its enterprise programs to train the next generation of AI engineers, and even a huge data labeling business called Toloka that is backed by Jeff Bezos and provides the critical training data and benchmarks needed for AI models and robotics.

Well, because of all this growth, the stock has been on an absolute tear as well, climbing over 200% over the past year. However, it's also a company that is spending enormous amounts of cash to fuel all of this grand expansion.

As a result, free cash flows are still projected to be negative even going into 2028.

Well, last quarter alone, for example, they spent about 5.7 billion on CapEx, which was 10 times their actual sales. I'm not saying it's not worth it. I do actually think that they have a bright future as a really, you know, compute provider through the cloud that is built with AI from the ground up, which is a very, you know, compelling offering. And we're seeing insane demand for all of that.

But, given the rich valuation that currently trades hundreds of percent higher than the sector, it's still going to be a pass for me personally as I already own just, you know, plenty of highly valued AI stocks as it is.

But, I will still rank them higher than Gen B, of course, for the enormous growth projections in the future, their diversity, and so on. So, I'll place it right around the middle. I'm going to put them at number four for now.

In my opinion though, Nebius has the more diversified far-reaching business with a stronger cash position as CoreWeave focuses more on raw scale that they achieve through leased facilities and extensive debt financing.

While also being heavily based in the US while Nebius holds a stronger focus on Europe and elsewhere with a global GPU fabric that really spans across more locations geographically.