Billionaire Stephen Mandel is a Tiger Cub who founded Lone Pine Capital after years of working with Julian Robertson’s Tiger Management.
The Q2 filings of Lone Pine show the fund opened new positions in two AI names.
Nebius Group N.V. (NASDAQ:NBIS) is the largest of the two and the biggest holding in the entire portfolio. Lone Pine bought about $1.18 billion worth of shares in the company, or 7.19% of the portfolio. Seagate Technology Holdings plc (NASDAQ:STX) came second. Lone Pine bought over one million shares worth about $965.1 million, or 5.90% of the portfolio.
Nebius is an AI cloud infrastructure company. It builds and operates data centers packed with powerful GPUs and rents that computing power to companies that need it to train and run AI models.
Stephen Mandel of Lone Pine Capital
Bull Case
Its services are in strong demand because AI companies need huge amounts of computing power, and that demand is already showing up in Nebius’s numbers. In the second quarter, revenue jumped 454% year over year to $582.3 million, while customer commitments reached more than $40 billion.
Bulls also point to the company’s pricing power. AI cloud contracts are being signed at around $20 million to $25 million per megawatt, while short-term deals for customers that urgently need computing capacity can fetch $40 million to $50 million per megawatt. This suggests customers are willing to pay a significant premium because AI computing capacity remains scarce.
Bear Case and Risks
The bear case is getting stronger. Nebius expects $20 billion to $25 billion in capital expenditures in 2026, compared with full-year revenue guidance of only $3 billion to $3.4 billion.
Nebius needs to build data centers, secure power, acquire GPUs and bring new capacity online on time. Any delays could push revenue further into the future while costs continue to pile up. A broader slowdown in AI infrastructure spending or an increase in available computing capacity could also weaken the company’s pricing power.
Valuation
Nebius trades at about 17.4 times forward EV/sales, compared with a sector median of roughly 3.5 times. Its forward EV/EBITDA multiple is around 41.6 times, versus the sector median of about 14.2 times. The premium reflects expectations for extraordinary growth.
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