Sell NVIDIA and Buy Nebius? Or is the AI Infrastructure Trade Getting Too Risky?

追加: 2026-05-26

[00:00:00]Nvidia is sitting near a five and a half trillion dollar market cap, and suddenly investors are asking whether the smarter move is to sell it and rotate into a much smaller AI rival. I mean, you'd think that would sound crazy, but Nebius has reported a monster quarter. The stock is up close to 490% over the last 12 months, and now the market is starting to ask a dangerous question. Is Nvidia still the best way to own AI infrastructure, or has the better opportunity already shifted somewhere else? Because it would be one thing if Nebius were just another AI hype stock, but this company is growing revenue at an unbelievable pace, raising billions of dollars, and building the kind of infrastructure that could make it one of the biggest winners in the next phase of the AI boom. At the same time, there's a catch inside those numbers that a lot of investors are going to miss. So, in this video, I'm going to break it down into the three parts.

[00:01:00]First, what Nebius actually reported, and why the headline profit number needs a little context. Second, why Nvidia still looks much stronger than a lot of people realize. And third, what this rotation trade could mean for both stocks from here.

[00:01:17]My name is Rick Orford. I'm a Wall Street Journal best-selling author. I've been trading since 1999, and no, I'm not a financial advisor. That is a good thing. I break down the numbers so retail investors like us can make smarter, more confident decisions with our money.

[00:01:31]I want to thank The Motley Fool for sponsoring this video. The Motley Fool is a company that provides investing insight and stock recommendations for investors of all skill sets and risk levels. And you all know how much I love researching new stocks and trying to find the next best investment. So, I'm proud to partner with The Motley Fool to bring you 10 stock picks from their popular product Stock Advisor. Stock Advisor has beaten the market by almost six times. Go to fool.com/ricco to get your 10 stock picks right now.

[00:02:05]Okay, so the rotation trade is one of the most seductive ideas in the markets and right now it's pointed straight at one of the most successful stocks in history.

[00:02:16]Nvidia Group just reported its earnings and the numbers were strong enough to bring back a question that's been quietly building up all spring. Should investors trim Nvidia, which has a market cap of 5 and 1/2 trillion, and rotate into Nvidia at roughly 52 billion? I mean, this came up in my community and I got to say what makes this question even louder is that Nvidia is up nearly 500% over the last 12 months. That's the kind of run that makes a rotation feel less like a trade and more like a calling.

[00:02:53]So, today I actually want to answer the question. Starting with Nvidia's first quarter 2026 earnings print.

[00:03:01]Revenue came in at 399 million for the quarter, which is up 684% from a year ago. Pause that for a second.

[00:03:09]Nearly seven x revenue growth in 12 months. It's not common, not even for an AI cycle. It tells you something important. Nvidia isn't just riding the AI story from the sidelines, it's actually pulling in major demand right now.

[00:03:27]Also, adjusted EBITDA flipped to a positive 129 and 1/2 million and that's from a 53.7 million dollar loss the year before. That is a big shift because when a company goes from losing money on an adjusted EBITDA basis to generating positive adjusted EBITDA, investors usually start thinking one thing, maybe the model is starting to work.

[00:03:54]Operating cash flow tells a similar story. It crossed the bridge from negative 184 million to positive 2.26 billion. So, on the surface, this looks like a company that's hitting an inflection point that most infrastructure businesses never reach this cleanly.

[00:04:11]Revenue is expanding, adjusted EBITDA is positive, cash flow looks much better, and you'd honestly expect the market to celebrate that, wouldn't you?

[00:04:21]But, this is where you'd have to read carefully because it's the part that most of the news today is going to miss.

[00:04:27]Net income came in at 621 million. Looks transformational, right?

[00:04:33]Until you check the fine print. 780.6 million of that came from a gain on the value of equity investments that Nebius holds in other companies. That's a real gain on outside investment, but it's not money the core business actually earned from selling cloud services. And that distinction matters because if you strip it out, adjusted net loss actually widened to 100.3 million from 83.6 million a year ago. So, the headline says profit, the core business still says loss. And the gap between those two things is exactly where retail investors can get caught if they only read the first paragraph.

[00:05:15]Now, most viewers will see Nebius reports 621 million in profit in their feed and never get any context. So, the honest read is this. Nebius is growing revenue spectacularly, but it's still losing money at the core business, and just on a much larger base. And the balance sheet tells the same story. Cash ballooned to 9.3 billion up from 3.7 billion at year-end, which sounds like a fortress. But, there's a catch. Most of that increase came from financing, not the core business. 4.3 billion of it came from issuing convertible notes alone, while another 2 billion came from pre-funded warrants. That's basically borrowed money plus money raised by promising to issue shares later on. It's a useful capital though by any measure, but it's not free.

[00:06:07]Meanwhile, total debt jumped from 4.1 billion to 8.4 billion and CapEx reached 2.47 billion in just 3 months against 399 million of revenue. I think that's something to think about because this isn't a normal software business where you can scale revenue with very little extra cost. This is AI infrastructure, right? It takes chips, it takes power, buildings, financing. It takes a lot of money before the payoff ever shows up. Now, I don't think it's reckless though. It's the only way to build infrastructure at this scale when GPUs are still very hard to come by. But investors still need to understand exactly what's the game here, what's being played.

[00:06:49]And Nebius is racing to lay down concrete, power, and silicon before AI demand ever cools off. And that's a capital intensity story, not a software story, and capital intensity stories trade very differently when sentiment turns. So yes, the growth is real, yes, the opportunity is real, but the risk is real, too. And that's why the comparison Nvidia matters so much because the rotation only makes sense if Nvidia is the worse investment between the two.

[00:07:23]And I don't think the math supports that. I mean, let's look at what Nvidia actually did last quarter. Revenue rose 73% year-over-year to 68.1 billion.

[00:07:36]Data center revenue alone was 62.3 billion. So Nvidia's data center segment is making more in a single quarter than Nevious is forecast to make all year.

[00:07:46]That's the first major difference.

[00:07:48]Second, Nevious is building towards scale, and video's already got it. And not just any kind of scale, it has the kind of scale where almost every serious AI infrastructure build-out eventually touches its chips, its systems, or its software ecosystem.

[00:08:05]Even Nvidia's CEO, Jensen Huang, also quantified at least $1 trillion of opportunity tied to Nvidia's Blackwell and Rubin chip platforms through 2027.

[00:08:18]That's not some vague dream. That's management putting a number on the demand pipeline. But the part that matters most here is valuation. Nvidia trades at roughly 46 times PE. Now, this is Nvidia I'm talking about, and its price-to-earnings multiple is that low?

[00:08:37]That shows how potentially undervalued the stock is. Meanwhile, Nevious trades at a whopping 406 times trailing earnings. That is a very different setup. The market's already pricing in a lot of success. It's pricing in the assumption that the 7 to 9 billion-dollar annual recurring revenue target gets hit. It's pricing in the assumption that execution stays flawless, and it's pricing in the assumption that AI demand stays strong enough to absorb all this new capacity.

[00:09:09]However, those are just assumptions. The point is Nvidia can disappoint, and the multiple still holds a lot better than most investors might expect. But for Nevious, there's practically no room for error.

[00:09:22]Every quarter has to land, every backlog dollar has to convert, and every major build-out has to stay on schedule.

[00:09:31]Otherwise, the market's reaction is going to be very unforgiving. Now, if you've been watching either of these two stocks, but think look, they're still too expensive. Maybe you buy want to buy one of them around 10, 15, 20% below where it is right now. Check this video up here because I talk about how you can sell a cash secured put on a stock you want to own and get paid to wait for it to potentially come down to your price.

[00:09:58]And if it does, you get to buy it and you got paid to buy it. And that ties directly into the bigger point here.

[00:10:06]Because when a stock has real earnings, real cash flow, and a real valuation that still looks reasonable for the growth it's producing, investors don't always have to chase the riskiest version of the same trend. Now, for the final question, should you actually cash out of Nvidia and buy Nebius? My answer?

[00:10:27]No. I don't think it's wise for investors to sell Nvidia just to buy Nebius. See, these two companies are connected at the business level.

[00:10:36]Nvidia invested $2 billion into Nebius back in March of 2026. Nebius is also one of Nvidia's strategic cloud partners. And the roughly $46 billion in contracted backlog that Nebius has built translates almost directly into GPU orders that land directly on Nvidia's income statement. And that's I think the part that a lot of people miss.

[00:10:59]If Nebius wins, Nvidia wins, too.

[00:11:03]So, selling Nvidia to buy Nebius isn't just taking more risk. It could mean giving up a company, a quality company, that's already monetizing the entire AI buildout in order to chase one infrastructure buildout that's still unproven, but in that ecosystem. Beyond that, Nvidia is a five and a half trillion-dollar compounder with proven free cash flow and a trillion-dollar demand pipeline already quantified by management. The risk in owning Nvidia right now comes down mostly to mostly whether growth slows from extraordinary to merely excellent. And that's a very different kind of risk. At the same time, Nebius is a $52 billion infrastructure builder with a core business that's still losing money. So, the risk in owning Nebius is fundamentally different. It's about whether execution holds up across 16 to 20 billion dollars in capex. It's about whether AI demand stays hot long enough for the backlog to actually convert into cash flow. And it's about whether investors keep rewarding the stock before the core business proves that it can generate durable profits. Those are two completely different risk profiles.

[00:12:21]And more importantly, when you sell Nvidia to buy Nebius, you're not rotating into a better version of the same trade. Instead, you're trading proven cash flow for a promise. But now I want to turn it over to you. Are you selling Nvidia to buy Nebius? Are you holding either of those companies? And is there any other company you'd like me to cover in the future? Let me know your thoughts in the comments below. And while you're there, if you found the video helpful, don't forget to like and subscribe because it helps others find the video, it supports the channel, and it makes sure that you don't miss out on my next deep dive. Well, that's it for me today. Thank you so much for watching, and I'll see you next time.