Michael Burry’s Bearish Bet Against Nebius Stock Sends a Warning Message to AI Bulls

Nebius Group (NBIS) recently posted one of the best quarters any AI cloud company has reported all year. Revenue more than quintupled, and the tech stock surged over 34% in a single trading session, following its Q2 results.

However, Michael Burry remains bearish on NBIS stock.

The investor, famous for calling the 2008 housing crash, added to his short position in Nebius the same day the numbers came out. Burry’s reasoning has less to do with Nebius itself than with what he thinks the whole AI buildout looks like right now.

Nebius Delivers a Blowout Quarter

Nebius, the Amsterdam-based, Nvidia-powered (NVDA) AI cloud provider that spun out of the Russian internet company Yandex, reported Q2 revenue of $582 million, up 454% year-over-year (YoY). By comparison, Wall Street forecast revenue of $572.75 million in Q2.

The company's core AI cloud segment grew even faster, jumping 514% to $575 million, and its annualized run rate revenue topped $3 billion by the end of June, up from $1.9 billion in Q1. 

Nebius closed four contracts averaging more than $1 billion each during the quarter, with customers including Reflection, Cohere, a major U.S. lab, and a large U.S. quant trading firm. 

About 70% of deals signed in the quarter included upfront prepayments covering 50% to 60% of the related buildout costs. Adjusted EBITDA margin for the AI cloud unit reached 50%, up from 45% the prior quarter.

The company ended June with $8 billion in cash and reaffirmed its full-year guidance, including capital spending of $20 billion to $25 billion.

Burry Doubled Down Short Position

Burry first disclosed his Nebius short on Aug. 6 at around $212 per share, a position he said was even larger than his short against Oracle (ORCL), placed around the same time. Less than a week later, after Nebius posted results that beat expectations across the board and the stock jumped to around $260, Burry added to the short.

According to Investing.com:

• In a Substack post the same day, Burry described Nebius as an example of what the peak of a boom looks like.
• He also raised short positions in Micron (MU) and Oracle.
• He already holds shorts against Nvidia, Palantir (PLTR), Applied Materials (AMAT), and Caterpillar (CAT), with Nvidia tied to his broader worries about circular financing arrangements across the AI supply chain.

Burry's skepticism was never really about whether AI companies can grow revenue. Instead, he has raised questions about how AI companies account for the hardware fueling the AI tailwind. 

His argument centers on depreciation schedules.

Burry contends that AI infrastructure companies are stretching the assumed useful life of GPUs, which realistically become outdated within two to three years, making current profits look better than they really are. 

In Q2 of 2026, Nebius reported depreciation and amortization expenses of $259.7 million, above the company's adjusted EBITDA of $236.2 million. Nebius also posted a GAAP net loss of $190.4 million in Q2. 

Moreover, Nebius extended the depreciation life of its servers and network equipment from four years to five at the start of 2026, citing usage patterns and the kind of accounting shift Burry says flattens results across the sector.

Burry has also flagged a separate worry around commitments that do not show up on the balance sheet, including leases that have not yet started and long-term purchase agreements, warning that these obligations have grown large across the industry.

What's Next for NBIS Stock?

Alternatively, deal sizes for Nebius are climbing, prepayments are covering a larger share of the company's buildout costs, and management says it could sell out its entire 2027 capacity today if it chose to. But Burry's trade is a reminder that even a company that beats every estimate can still serve as a proxy for a bigger argument.

Valued at a market cap of $69 billion, NBIS stock is priced at 20x 2026 sales, which is expensive. Analysts project revenue to grow from $3.41 billion in 2026 to $53 billion in 2030. The company is estimated to report a free cash outflow of $70 billion through 2030. It ended Q2 with $8 billion in cash, which suggests Nebius will raise capital multiple times before it turns profitable. 

Out of the 17 analysts covering NBIS stock, 10 recommend “Strong Buy,” and seven recommend “Hold.” The average NBIS price target is $254.07, below the current price of $265.