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Hammond Power Solutions Inc. Class A Subordinate Voting Shares (HPS.A)
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Vertiv Holdings LLC Class A (VRT)
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Nebius Group N.V. (NBIS)
Q: What would you do with the above 3 stocks if think less AI infrastructure will be needed? Take the money and run? Or did they fall enough that they will be ok even if some orders are lowered or cancelled?
5i Research Answer:
With the caveat that NBIS is high risk and has speculative components to it, it has a setup that is a bit different than other AI names given the various businesses within it, cash balance, and pending revenue ramp. We have additional comments posted on it this morning.
VRT should have some runway left we think but we might wait for big tech earnings before considering adding.
For HPS, at 15X forward earnings, we wouldn't be too concerned here but it will be sensitive to any hint of a slowdown in AI infrastructure spend. But its valuation and other busineses make it far less vulnerable.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in NBIS.