Michael Burry vs. Nvidia: What to Know as Burry Bets Against Nvidia-Backed Nebius Stock

One of the market’s most famous investors just bet against a company Nvidia (NVDA) is backing: Nebius Group (NBIS). A few weeks ago, Nvidia disclosed a 9.3% stake in the company, sending NBIS stock up 16% in a single day. Then, on Aug. 6, Michael Burry revealed he had shorted it. The investor who called the 2008 housing crash is now betting against one of the biggest winners of the AI boom. The stock, which had been trading around $226 in early August, fell to roughly $186 within days of his disclosure.

Burry’s argument isn’t really about Nebius alone. He shorted Oracle (ORCL) at the same time and pointed to a wider problem he sees across AI infrastructure. Burry believes that if the demand slows, companies taking on heavy debt and long-term commitments could be in serious trouble. Nebius is a company that he thinks fits this profile. The company raised its 2026 capital spending guidance to a range of $20 billion to $25 billion, while its long-term debt more than doubled to $8.4 billion. For a bear, that’s the whole case.

Why Nebius Is the Wrong NeoCloud to Bet Against

The problem with the bear case is that Nebius already has answers to those worries. As I covered previously when comparing it with CoreWeave (CRWV), Nebius is the fastest-growing name in the space. Its first-quarter revenue skyrocketed 684% from a year earlier while its margins also improved. More importantly, the spending Burry points to is tied to demand that is already committed. Management said on its last call that it is “building for 2027 demand where we have customer commitments already in place,” giving it visibility into the revenue those investments will produce. The company also sold out its capacity during the quarter and funded much of the build through upfront customer payments, not just borrowing. 

None of that makes the debt disappear, and Burry may still prove right on timing. But his worry is that the spending is a gamble on demand that might not materialize, and that’s the one thing Nebius has already answered. As CEO Arkady Volozh said during the last call, “Everything we build, we sell, and we are still in the very early days.” Its earnings on Aug. 12 will show whether that still holds. 

About Nebius Stock 

Nebius Group NV is a technology company that engages in building full-stack infrastructure to service the global AI industry in the US, UK, and internationally. It provides cloud computing services, large-scale GPU clusters, and developer tools for AI applications. The company also owns TripleTen, an online technology education platform, and Avride, a developer of autonomous driving and delivery robot technology. Moreover, it has a strategic alliance with Nvidia to support the expansion of the company’s AI cloud infrastructure. Founded in 1989, the company is based in Schiphol, the Netherlands. 

Over the past year, NBIS stock has increased 174%, far outperforming the S&P 500’s ($SPX) 21% gain during the same period. The stock has been fairly volatile, climbing from roughly $92 in late March to $286 by June 18 and then down to $148 by mid-July. Similarly, on a year-to-date (YTD) basis, NBIS has surged 125%, comfortably outperforming the S&P 500’s 13% gain during the same period.

Nebius is difficult to assess on traditional measures. Its forward GAAP price-to-earnings (P/E) isn’t meaningful, since the company is still running losses as it builds out capacity. The forward price-to-sales (P/S) of 14.25x also can’t be compared to the company’s multi-year average, since Nebius only went public again less than two years ago. But on its own, the P/S ratio seems steep. The EPS outlook, on paper, seems to back Burry’s argument. Analysts expect earnings to decline sharply by 79% in 2026 and again by 94% in 2028. However, those falling earnings reflect near-term profits being dragged down due to heavy spending, not weak demand. 

Looking at the balance sheet, Nebius holds $9.37 billion in cash against a total debt of $9.59 billion. Net debt is small for a company worth over $48 billion. That debt figure, though, will likely increase for Nebius as it continues to invest heavily to meet strong demand, which is what bears like Burry are concerned about. The coming quarter will reveal if that can be answered by revenue keeping pace with the borrowing. In the last quarter, revenue increased 684% YoY and 75% QoQ, and investors will want that momentum to continue.

Nebius Raises Outlook as AI Demand Continues to Accelerate

Nebius Group NV reported its first-quarter fiscal 2026 earnings on May 13. The company reported revenue of $32.44 billion, comfortably beating the Wall Street consensus of $29.22 billion. The earnings per share came in at $171.54, far exceeding the -$62.2 forecast. The company’s AI business was a major contributor, accounting for 98% of total revenue. Group-adjusted EBITDA was $130 million, a significant increase from previous quarters. 

Looking forward, Nebius has revised its capital expenditure guidance upwards to $20-$25 billion for 2026. The company plans significant capacity additions and strategic investments to sustain growth. Moreover, strategic partnerships and acquisitions support the company’s future growth prospects. For the full year 2026, NBIS expects revenue to reach between $3 billion and $3.4 billion. Management reaffirmed a long-term group-adjusted EBITDA margin target of approximately 40% for the full year.

What Do Analysts Expect for NBIS Stock?

The analysts remain divided on Nebius. On Aug. 7, D.A. Davidson analyst Alex Platt reiterated a “Hold” rating with a price target of $175. In contrast to Alex, Citi analyst Tyler Radke maintained a “Buy” rating on Nebius. The analyst set a price target of $278, which reflects a 48% upside from current levels.

Based on 17 Wall Street analysts with coverage, Nebius carries a consensus “Moderate Buy” rating. NBIS stock currently sits below the mean price target of $252, reflecting a 34% potential upside from here. The high target of $410 implies an impressive 118% upside from the current share price.