Shares of AI cloud company Nebius Group jumped as much as 34% following its second-quarter earnings report, pushing the stock roughly 22% above the $212 entry point where investor Michael Burry disclosed a short position just days earlier. Nebius now trades near $259, and the rally has left one of the market's most closely watched bearish bets sitting underwater, at least for now.
Burry revealed the short on Aug. 6, describing it at the time as larger than a short position he had simultaneously placed against Oracle. The disclosure came without the backing of a registered hedge fund: Burry closed Scion Asset Management, deregistering it with the SEC in late 2025, and now shares his positions through a personal newsletter rather than regulatory filings.
The numbers behind the rally
The earnings that triggered the surge were not marginal. According to Nebius's own second-quarter results, group revenue grew 454% year-over-year to $582.3 million, while its core AI cloud segment rose 514% to $575 million, or 98% of total revenue. Annualized run-rate revenue reached $3 billion by the end of June, up 598% year-over-year, and the company reported adjusted EBITDA of $236.2 million at a 41% margin, a sharp turnaround from a $21 million loss in the same quarter last year. Nebius also reaffirmed full-year guidance of $7 billion to $9 billion in annualized run-rate revenue.
Burry's thesis isn't fully dead
The results undercut the simplest version of the bear case, that demand for Nebius's AI infrastructure was thin or unproven. Contracts are largely prepaid and the company has consistently hit its own targets. But the harder part of Burry's argument remains open: Nebius reported $259.7 million in depreciation and amortization in the quarter, more than its adjusted EBITDA of $236.2 million, keeping alive questions about whether AI infrastructure companies are stretching out equipment depreciation schedules in ways that flatter near-term profitability. At roughly 20 times guided 2026 revenue, the stock's valuation also leaves little room for error if growth decelerates.
Burry's Nebius short isn't an isolated bet. He has also disclosed short positions against Palantir, split across put options at different strike prices and expirations, as part of a broader wager that the market has misjudged the durability of AI-driven earnings growth. Palantir shares have also risen since Burry's disclosures, putting that position in a similar bind.
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For now, the market has sided decisively with Nebius's growth numbers over Burry's skepticism. Whether that holds depends largely on the depreciation question he's raised: if AI infrastructure spending continues to outpace the useful life assumptions companies are using, today's strong margins could prove harder to sustain than this quarter's results suggest.
