The $211.77 Wager: Michael Burry's Short Bet Collides With Nebius's Breakneck Growth

Nebius faces Burry's depreciation critique as Q2 results loom; stock down 38% from June peak despite 684% revenue growth.

When Michael Burry opened a short position against Nebius Group in early August, he entered the trade at $211.77 per share. By Friday's close, the stock had fallen to €162.56 — a decline that, on the surface, appears to vindicate the legendary investor who famously bet against the US housing market in 2008. But the picture is far more complicated than a simple winning trade.

Burry's public characterization of the position as a "Fish in a Barrel" — essentially calling it an easy target — has injected an unusual dose of drama into what is already shaping up to be one of the most consequential earnings weeks for the AI infrastructure sector. On Wednesday, August 12, Nebius reports its second-quarter results before the Nasdaq open, and the numbers will either validate the bearish thesis or expose it as premature.

A Stock Caught Between Two Narratives

The tension surrounding Nebius is palpable in the price action. The shares have been on a remarkable run — up 121.17 percent since the start of the year and 187.72 percent over the past twelve months. Yet the momentum has clearly stalled. Over the last 30 days, the stock has shed 14.18 percent, and it now sits roughly 38 percent below its June peak of €261 (the secondary source puts the distance from the record high at 37.72 percent).

Friday's session encapsulated the uncertainty: the stock closed at €162.56, down 1.49 percent on the day, with the recent recovery attempt losing steam. The relative strength index sits at 45.4 — a neutral reading that signals neither overbought nor oversold conditions. Meanwhile, annualized volatility over the past month has reached 154.12 percent, a figure that underscores just how frayed investor nerves have become.

The Depreciation Debate

Burry's bearish argument centers on a technical accounting issue rather than the company's operational performance. His claim: AI infrastructure players are inflating their profits by depreciating their graphics processing units too slowly. In Oracle's case, he estimates earnings could be overstated by 26 to 27 percent by 2028. The implication for Nebius is similar — that the company's reported financials paint a rosier picture than the underlying economics justify.

The market took the news of Burry's position seriously. On August 6, the stock dropped roughly 10 percent to around $197, adding to a July that had already seen the shares fall 31.1 percent. That two-week slide erased a substantial portion of the gains accumulated during the AI infrastructure rally.

Growth That Demands Capital

The operational story, however, remains compelling. In the first quarter of 2026, Nebius generated $399 million in revenue — a 684 percent jump from the $50 million posted in the same period a year earlier. The core AI infrastructure business grew even faster, expanding 841 percent to $390 million. Adjusted EBITDA reached $129.5 million with a 32 percent margin, though the company still recorded a net loss of $100.3 million.

The growth trajectory has prompted management to raise its capacity guidance dramatically, from 1 gigawatt to over 4 gigawatts. A five-year contract with Meta, potentially worth up to $27 billion, provides a substantial foundation for that expansion.

But growth at this scale requires enormous capital. Nebius invested $2.5 billion in GPUs during the first quarter alone, and the full-year capex forecast now stands at $20 to $25 billion, up from a previous range of $16 to $20 billion. The company ended Q1 with $9.3 billion in cash after raising $6.3 billion during the quarter — including a $2 billion investment from Nvidia, a vote of confidence that bulls point to as evidence of Nebius's strategic importance in the AI ecosystem.

The financing mix, however, is where the bear case gains traction. In July, Nebius took on an additional $775 million in debt. For skeptics, this signals that growth is increasingly being funded through leverage — a more expensive and riskier proposition than equity financing. The company expects full-year revenue of $3.0 to $3.4 billion, but critics note the valuation gap: on expected revenue, the stock trades at roughly 14 times sales, while the sector averages 3.3 times. Based on trailing twelve-month revenue, the multiple balloons to around 55.

Analysts Split, Consensus Forms

Wall Street appears genuinely divided on Nebius. Northland Securities recently set a price target of $410, well above current levels, while Wall Street Zen has flipped to a "Strong Sell" rating. Such stark disagreement among analysts is unusual and reflects the fundamental question at the heart of the debate: is Nebius's growth rate sustainable, or is the market for expensive AI compute capacity approaching its limits?

For the second quarter, the consensus estimate calls for revenue of $578 million and a loss of $0.52 per share. The market will be watching two metrics closely: whether the revenue momentum from Q1 can be maintained, and whether the company can demonstrate cost discipline given its recent debt accumulation. A narrowing loss per share would suggest the expansion is becoming more efficient; a widening one would give Burry's thesis additional ammunition.

The Moment of Truth

Wednesday's report will likely resolve the current stalemate. If Nebius confirms its upgraded capacity and revenue guidance, the short thesis loses some of its force. If losses come in wider than expected, the debate over AI infrastructure valuations will intensify.

Until then, the stock remains hostage to the broader sentiment in the chip and cloud sectors. But the real test arrives with the numbers. Burry has made his bet public and his characterization of it dismissive. The question now is whether Nebius's explosive growth can make that confidence look misplaced — or whether the concerns about the cost side of the ledger prove him right.