Nebius: Between a Burry Short and a Vineland Zoning Fight, the AI Infrastructure Story Hangs on August 12

Nebius shares fell 13% after Michael Burry disclosed a short bet and local opposition to a New Jersey data center emerged, despite strong growth.

The sell-off that knocked roughly 13 percent off Nebius shares on Thursday had the look of a classic double-whammy: a prominent bearish bet from a famous investor landing on the same day as community opposition to a planned data center in southern New Jersey. By Friday morning, the stock had clawed back some ground, trading at 170.82 euros in German markets, up 3.51 percent. But the bounce does little to obscure the central tension now defining the AI infrastructure provider's narrative — a growth story so richly valued that it has become a magnet for skeptics.

Burry's Bearish Wager Targets the Depreciation Question

Michael Burry, the investor best known for betting against subprime mortgages before the 2008 financial crisis, disclosed short positions against both Nebius and Oracle on Thursday. His entry points were telling: 144.63 US dollars for Oracle and 211.77 US dollars per Nebius share. The core thesis, as outlined in the filings, centers on accounting rather than demand. Burry argues that AI infrastructure companies are systematically overstating profits by depreciating expensive graphics processors too slowly. In Oracle's case, he calculates earnings could be overstated by 26 to 27 percent by 2028.

Notably, Burry avoided put options on Nebius — a deliberate choice, given that the stock's implied volatility already exceeds 100 percent, making options strategies prohibitively expensive. His broader short book also includes positions on Nvidia and Palantir, while he has expanded long holdings in Flutter, Fiserv, Zoetis and Mercado Libre.

A 300-Megawatt Project Meets Local Resistance

The Burry disclosure alone might have rattled the stock, but it landed alongside a separate headwind. Residents in Vineland, New Jersey, are pushing back against a proposed data center that would draw 300 megawatts of power and occupy an area roughly the size of 45 football fields. The combination — a high-profile short seller on one side, local opposition to physical expansion on the other — hit the share price from two directions at once.

The stock closed Thursday at 165.02 euros, down 12.98 percent. That leaves the shares roughly 34.55 percent below the record high reached in June, and notably below the 50-day moving average of 196.36 euros. From the 52-week peak of 261.00 euros, the distance is now 36.77 percent. Even after the recent turbulence, however, the year-to-date gain stands at a formidable 124.52 percent.

Nvidia's Stake and a Meta Contract Provide the Counterweight

For all the bearish noise, the fundamental picture remains striking. Nvidia holds more than 22 million Nebius shares — nearly 10 percent of the company — funded through an investment of roughly 2 billion US dollars, according to The Motley Fool. Nebius has also signed a 27-billion-US-dollar contract to provide AI computing capacity to Meta, with Microsoft counted among its other customers.

The operating momentum is hard to argue with. First-quarter 2026 revenue grew 684 percent year over year, and The Motley Fool projects second-quarter growth of around 450 percent. The company's full-year guidance stands at 3.0 to 3.4 billion US dollars in revenue. Analyst price targets for the stock range from 120 to 410 US dollars, with most ratings still in buy territory.

The Valuation Debate: Priced for Perfection

That growth, however, carries a premium that makes the stock vulnerable to exactly the kind of setback seen Thursday. According to Simply Wall St, Nebius trades at a price-to-earnings ratio of 66.1, against an industry average of 31.4 and a narrower peer group at 39.4. The firm's own valuation model suggests a theoretically fair P/E of 74.0 — but the stock passed only one of six valuation checks the model runs.

The implication is straightforward: a substantial portion of the optimistic growth expectations is already reflected in the share price. That leaves limited margin for error, and any negative news — whether a short-seller's accounting critique or a local zoning dispute — can trigger outsized moves.

August 12 Becomes the Next Test

All roads now lead to August 12, when Nebius reports second-quarter results before the market opens. The analyst consensus calls for a loss per share of 0.61 US dollars on revenue of 578.22 million US dollars. That print will be the first real opportunity for management to address the depreciation question Burry has raised, and to demonstrate that the infrastructure spending spree is translating into durable, profitable growth.

The constellation of forces — a prominent short position, grassroots resistance to expansion in the US, and the continued backing of Nvidia — sets up a genuine test of the neocloud thesis. For now, the market seems caught between two narratives: one of exceptional growth backed by marquee customers, and another of accounting questions and physical-world friction. The August earnings call will do much to determine which story wins out.