An investor from "Short Game" bet against Nebius ahead of its quarterly report
This year, Nebius shares have risen 130% in price, but most analysts still recommend buying them / Photo: Piotr Swat / Shutterstock.com
Michael Burry, known as the inspiration for the character in *The Big Short*, has begun shorting shares of Nebius, a cloud computing provider founded by Yandex co-founder Arkady Volozh. Burry wrote about this on his blog, Cassandra Unchained, on Substack on August 6.
The investor reported that he had opened a short position in Nebius shares with an entry price of $211.77. On the day the trade was executed, Nebius shares fell 13% to $189.88. Burry noted that he had also considered buying put options on Nebius shares (which allow investors to profit from a decline in the asset’s price), but decided they were too expensive. At the same time, he shorted Oracle shares, according to his post.
Burry did not go into detail about why he chose these particular companies for his latest deals. In his post, he merely compared his deals to shooting “fish in a barrel.” By “fish,” he refers to companies that have “overcommitted”—specifically, to future purchases and lease agreements that have not yet taken effect, which are not fully reflected on the balance sheet but could become a significant financial burden.
"The fish have become very fat and very large—it's become too easy to catch them. But they've grown so big that it seems they'll all soon start floating belly-up, every last one of them, due to a lack of oxygen."
Burry, who rose to fame after betting against the U.S. mortgage market ahead of the 2008 crisis, recently warned that the stock market could face a crash comparable to “Black Monday” in 1987. The investor is shorting shares of companies involved in artificial intelligence: Micron, Nvidia, Caterpillar, Palantir, Tesla, and Applied Materials, as well as the entire semiconductor sector (SOXX ETF).
Context
Amsterdam-based Nebius rents out computing power for artificial intelligence. The company has signed a five-year agreement with Microsoft worth $17.4 billion, with the potential to increase the amount to $19.4 billion, and a contract with Meta to provide infrastructure worth up to $27 billion. In July, Nebius disclosed that Nvidia, the global market leader in AI graphics processors, holds a 9.3% stake in the company.
On August 12, Nebius will release its second-quarter financial results. In its first-quarter report, Nebius reported a 684% year-over-year increase in revenue, to $399 million. For 2026, the company forecasts revenue of between $3 billion and $3.4 billion and annual recurring revenue (ARR) of between $7 billion and $9 billion.
In July, Nebius shares, which trade on the Nasdaq, fell 30% amid a broad sell-off in the AI sector and news that one of its major clients, Meta Platforms, is developing plans to launch a competing cloud infrastructure business.
Despite the July decline, the stock has risen 130% since the beginning of the year. However, only one of the 19 analysts tracking the company recommends that investors lock in their profits by selling their shares, according to MarketWatch data. Most analysts continue to recommend buying. The consensus price target of $269.36 implies a 40% increase from the closing price on August 6.
This article was AI-translated and verified by a human editor
