Citron’s Bull Thesis on Nebius.

For those familiar with Yandex, the Russian tech giant that was once often referred to as the “Google of Russia,” you’ll recall how its stock was suspended in 2022 following Russia’s invasion of Ukraine and the resulting economic sanctions. Shareholders were left in limbo for over two years. During this period, management orchestrated a remarkable corporate exit from Russia, ultimately securing $5.2 billion in a deal that saw Yandex’s Russian operations sold despite the Kremlin’s mandated 50% discount on foreign transactions. The remaining assets, including valuable international businesses and non-Russian operations, were retained under the Yandex umbrella​

In October 2024, Nebius (formerly Yandex) emerged with a new name, business model, and a powerful strategy that is quickly gaining attention. This new narrative is one that Citron believes investors cannot afford to overlook.

Nebius: A High-Performance AI-Centric Cloud Platform

At its core, Nebius is an AI-focused cloud platform designed for intensive workloads, a rapidly growing sector driven by the explosion of artificial intelligence. The company’s proprietary software architecture and custom-designed hardware—encompassing everything from servers to data racks and complete data center infrastructure—form the backbone of its cloud services. Nebius gives developers the compute power, storage, managed services, and tools necessary to build, train, and deploy AI models at scale. This puts Nebius in direct competition with other cloud giants like CoreWeave, which specializes in similar AI workloads​

Nebius also manages several other smaller yet intriguing business segments. However, for the sake of a focused evaluation, we’ll concentrate on its core cloud infrastructure offering, which forms the majority of its revenue base.

Arkady Volozh: A Proven Leader with Unmatched Vision

Citron’s investment strategy has always been clear: bet on proven winners. Arkady Volozh, the mastermind behind Yandex, is a figure who epitomizes success in the tech world. Volozh transformed Yandex into the leader of the Russian tech economy, earning respect not only within the country but internationally. Despite his outspoken condemnation of Russia’s invasion of Ukraine, calling it “barbaric,” even Russian President Vladimir Putin recognized Volozh’s extraordinary capabilities, stating that he was a “talented man” entitled to his opinion​ This level of respect and recognition from the Kremlin underscores the magnitude of Volozh’s influence.

The Nvidia and Accel Partners Investment: A Major Validation

The story of Nebius is further strengthened by a significant investment partnership. In late 2022, despite Nvidia’s full exit from Russia, Nebius secured a $700 million investment round, which was oversubscribed and completed at a 3% premium to its trading price. This rapid and successful fundraising just six weeks after resuming trading reflects not only the confidence investors have in Nebius but also in Volozh’s ability to execute large-scale AI strategies. Nvidia’s participation, in particular, adds tremendous credibility, as the company had previously withdrawn from Russia amid sanctions

This speaks volumes about Nebius’ potential in the AI and cloud sectors.

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