Michael Burry Just Shorted Nebius. Should Investors Avoid the Stock?
Investors are once again paying close attention to Michael Burry after the Big Short investor revealed he has taken a short position against Nebius. With the company scheduled to report earnings this week, Burry’s public bet has added a layer of tension to the stock’s performance. His skepticism likely stems from a combination of the company’s steep valuation and a staggering amount of debt accumulated during its rapid expansion. However, history shows that even someone with Burry’s track record doesn’t hit every mark, leaving some analysts to wonder if this could be one of his rare missteps.
Despite the bearish outlook from Burry, Nebius finds itself positioned at the heart of the artificial intelligence gold rush. As tech giants like Microsoft and Meta scramble to build massive data centers requiring gigawatts of power, specialized neocloud providers like Nebius are filling critical gaps in infrastructure. Unlike older data centers that struggle with modern AI workloads, Nebius is already bringing compute capacity online and securing long term deals with industry leaders. This trend is backed by broader market signals, such as SK Hynix investing billions into new memory chip plants to keep up with an insatiable demand for AI hardware.
The primary concern for cautious investors remains the balance sheet. Long term debt jumped significantly from 4.1 billion dollars in late 2025 to 8.4 billion dollars by early 2026, excluding another billion in lease liabilities. While these numbers are jarring, they come alongside explosive growth; revenues surged by over six hundred percent year over year in the first quarter alone. Though the company continues to operate at a net loss, it currently sits on roughly 9.3 billion dollars in cash, providing a significant cushion as it scales its operations.
Ultimately, the debate surrounding Nebius comes down to whether its aggressive borrowing is a reckless gamble or a necessary strategy for dominance in a fast moving sector. While short sellers like Burry may find success through short term volatility around earnings reports, the underlying momentum of the AI build out suggests a stronger foundation for those looking further ahead. If Nebius can efficiently deploy its cash reserves and convert its growing capacity into consistent profit, the long term trajectory may prove far more optimistic than Burry anticipates.
