Nebius’s Price Hike Suggests Michael Burry Made a Mistake and Is Shorting the Best Neocloud Stock
On August 7, Michael Burry disclosed a new short position in Nebius Group (NBIS), choosing to short the equity directly rather than paying high prices for puts. This move underscores Burry's bearish outlook on the rapidly growing AI infrastructure company. Notably, Nvidia (NVDA) recently invested 9.3% in Nebius, further bolstering the company's value.
Burry's decision to short Nebius raises the question of whether he believes the company is nearing its peak valuation or if the market is overestimating the potential of a top neocloud stock. The recent price hike for selected Nvidia chips, effective from Oct. 1, adds to Burry's concerns about Nebius's financial health. Despite this, the stock rose 10% in pre-market trading following Nvidia's investment announcement, before correcting as the market opened, a common pattern for a stock with high short interest of 19%.
Nebius reported strong second-quarter earnings on August 12, with revenue surging 454% year over year to $582.3 million, while adjusted EBITDA improved to $236 million, a significant turnaround from a loss of $21 million in the same period last year. The company expects full-year 2026 revenue between $3 billion and $3.4 billion and annualized run-rate revenue of $7 billion to $9 billion, with adjusted EBITDA margin of about 40%.
Analysts remain largely positive, with a consensus Moderate Buy rating and median price target of $293, indicating a 40% upside potential.
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