Apr. 25 at 3:42 PM
$NBIS trying to make a little sense of price activity last week. We know it isn’t just us because CRWV was down as well. A little sector rotation and re-pricing took place. Capex + profitability uncertainty raised their pesky little heads. The cost of growth is being reassessed in my mind. We’ve gone from “an environment of unlimited upside where capex is of little concern” to “ How much will this cost? When does this turn into cash flow? And, “ What if ROI takes longer?”
The rapid rise from
$100-
$165+ left a lot of “ air pockets” in the chart. This has left the door open to sector rotation, momentum unwind & pre-earnings de-risking. Pre-earnings has generally seen funds reducing exposure, volatility increases and a rise in narrative uncertainty.
Bull case might see a winddown to
$140 with earnings confirming both demand and backlog leading to resumption of trend and a fast track to
$180-
$200.
Bear case: higher capex, unclear margins and project delays/pushback.
Long-term story: STRONG
