Nebius (NBIS) Stock: Why Michael Burry’s Short Bet Challenges a 125% YTD Gain

Key Takeaways

• NBIS shares declined 31.1% throughout July yet maintain a 125% year-to-date increase
• A short position from Michael Burry sparked a 13.29% one-day decline
• First quarter revenue jumped from approximately $50M to $400M compared to last year
• The company secured $775M in debt financing during mid-July, adding to $6.3B obtained in Q1
• Second quarter financial results are scheduled for Wednesday, Aug. 12

July proved challenging for Nebius Group (NBIS). The artificial intelligence cloud infrastructure provider experienced a 31.1% monthly decline in its share price, highlighted by a dramatic 13.29% single-session plunge following news that prominent hedge fund manager Michael Burry had taken a short position against the company.

Nebius Group N.V., NBIS

Nonetheless, NBIS shares maintain a remarkable 125% gain for 2026. Recent trading saw the stock priced at $187.97, within its 52-week trading band of $62.01 to $299.86, while commanding a market capitalization near $47 billion.

The disclosure of Burry’s bearish stance intensified existing concerns regarding Nebius’ ambitious data center expansion strategy and whether its present market valuation remains defensible.

Research from Simply Wall St analysts establishes a fair value target of $245.43, implying approximately 22.6% upside potential from current trading levels. This projection depends substantially on Nebius’ ability to maintain explosive growth within the AI computing infrastructure sector.

The shares command a P/E multiple of 66.1x, representing more than twice the 31.4x average for the US Software sector and exceeding the 39.4x peer group median.

Exceptional Revenue Expansion

First quarter revenues skyrocketed from around $50 million in the prior-year period to $400 million. Such dramatic expansion commands attention.

Nebius has simultaneously expanded its committed power capacity significantly. Projections have climbed from a baseline of 1 GW last August to exceeding 4 GW currently. The firm has locked in as much as 1.2 GW of electrical power and real estate for an upcoming AI facility in Pennsylvania.

However, expansion demands substantial capital. Nebius deployed approximately $2.5 billion during Q1 exclusively, predominantly for GPUs and associated hardware. Company leadership identified increasing co-location expenses, operating lease commitments, and staffing costs as primary expenditure categories.

Significant Capital Infusion Raises Stakes

During mid-July, Nebius obtained $775 million through debt financing instruments to fuel continued expansion initiatives. This followed an enormous $6.3 billion capital raise in Q1, comprising a $2 billion equity stake from Nvidia alongside $4.3 billion from convertible instruments.

The magnitude of capital investment poses a critical question: will revenue expansion match the aggressive spending trajectory?

Trading at approximately 14 times projected sales, the valuation cannot be characterized as inexpensive. Any indication that clients might decelerate their cloud infrastructure commitments could apply additional downward pressure on shares.

Attention now focuses squarely on Wednesday, Aug. 12, when Nebius unveils Q2 financial performance. Market participants await clarity on computing capacity expansion, customer acquisition momentum, and whether the cost pressures evident in Q1 have moderated.

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