Q: corweave and nebius both got hammered in november, i know you had nebius as a top pick when you were on bnn.it went straight up then straight doen.
which do you prefer now and why.would you buy both or stay away. dave

Q: Hi 5i Team,

I have been researching the financing models of neocloud operators. It appears that these companies are financing their GPU infrastructure investments at capital costs that significantly exceed their return on invested capital (ROIC). In other words, their cost of capital is materially higher than their ROIC, resulting in a value destruction dynamic where each dollar of new capital deployed actually destroys economic value rather than creating it.

This situation raises questions about sustainability:

1. How are CoreWeave, Nebius, and similar operators financing these substantial infrastructure buildouts, given the mismatch between capital costs and ROIC? Is this model sustainable in the long term, or does it rely on continuous refinancing and favourable market sentiment?

2. Considering Galaxy Digital's recent announcements regarding data center partnerships and infrastructure initiatives, how exposed is Galaxy Digital to these neocloud operators? What percentage of GLXY's revenue or growth expectations is tied to these relationships?

3. If the neocloud financing model proves unsustainable, meaning operators like CoreWeave or Nebius encounter difficulties with refinancing or solvency, what impact would that have on Galaxy Digital's business and financial projections?

I would appreciate your perspective on whether this concern regarding capital structure is reflected in GLXY's valuation, or if it poses an underappreciated risk for investors.

Thank you for your continued insights and research.

Best regards,

Matt

Q: I listened to an interview on BNN (link at end if you want to include it in post) in which a prominent analyst tore into the CRWV model. His take is that they are borrowing money to build data centres and that the return from those centres is half the cost of what they borrowed to build them. He further states that companies like GOOG and META are building their own capacity with cash on hand and taking advantage of Coreweave for cheap capacity. His thesis is bankruptcy within a few years.

My question (and it applies to NBIS too) is that you either agree or play devil's advocate to his thesis and explain why he is correct or incorrect. It's just one analyst and of course there are two sides to every trade but is there a clear path to creating strong returns on these data centre investments or are they in fact spending money just to lose money? If he is correct on CRWV, is NBIS different?
Thanks

https://www.bnnbloomberg.ca/video/shows/trading-day/2025/11/11/even-if-they-do-deploy-that-capital-theyre-destroying-value-luria-on-coreweave/