Serenity bucks the trend by favoring select Neocloud companies, stating that financing and potential approval restrictions may raise barriers to entry.

November 8 — Serenity posted that new-type cloud service providers (Neoclouds) such as NBIS have become attractive after their valuations fell sharply. He believes that vendors may still perform well if they have close relationships with suppliers such as Nvidia, own contracted capacity and necessary permits, have well-funded partners, and can finance equipment purchases at reasonable costs.

Citing IREN's financial report, he said that prepayments under a five-year agreement can cover 90% of GPU capital expenditures, showing that listed Neoclouds can adapt to a tight financing environment. The recontracting price of its older H100 GPUs reached twice the previous level, which he believes also runs counter to some market concerns about equipment depreciation.

On approvals, Serenity cited a Rosenblatt research report saying that NBIS's major construction projects in Missouri, Pennsylvania, and South Carolina carry low risk. He is more concerned about new entrants that have just begun financing or permit processing, and believes that tightening financing and potential approval restrictions may instead expand the competitive advantage of existing Neoclouds and build a stronger moat for them.