The most intriguing tension in the AI infrastructure trade right now isn’t between competing chipmakers or cloud providers — it’s between a famous bear and a chorus of bulls staring at the same set of numbers and reaching wildly different conclusions.
Michael Burry, the investor who famously bet against subprime mortgages before the 2008 financial crisis, has been adding to his short position in Nebius over the past two weeks, most recently at $247 per share. His public rationale cuts straight to the heart of the debate: the company looks like “what the top of a boom looks like.” The stock, however, has kept climbing since he said it.
A Growth Story Written in Contradictions
The numbers Nebius delivered last Saturday for the second quarter are, on their face, extraordinary. Revenue surged 454 percent year-over-year to $582.3 million, with the AI cloud segment growing even faster at 514 percent — to the point where it now constitutes virtually the entire business.
But the bottom line tells a different story: a net loss of $190.4 million. The one bright spot on the profitability front was adjusted EBITDA, which swung from a loss in the year-ago quarter to a positive $236.2 million, translating to a 41 percent margin.
The company is pouring money into infrastructure at a staggering clip — $20 billion to $25 billion in capital expenditures planned for this year — and management reaffirmed its 2026 revenue guidance of $3.0 billion to $3.4 billion at a 40 percent EBITDA margin. For a business growing at this pace, that forecast looks almost conservative.
The Order Book That Keeps Bulls Coming Back
What has analysts most excited isn’t just the headline growth — it’s the quality of the demand behind it. Nebius signed four AI cloud contracts in the second quarter, each averaging more than $1 billion in total value. The total contract value nearly quadrupled sequentially, and for new customers it jumped more than ninefold.
Perhaps the most striking detail: roughly 70 percent of the quarter’s deals included customer prepayments covering 50 to 60 percent of the associated capital expenditures. The company now expects more than $9 billion in customer prepayments for the full year, which helps explain why investors remain calm despite the massive investment outlay. Nebius also raised its contracted power capacity target to 5 gigawatts by year-end, underscoring the scale of its planned data center buildout.
The backlog now stands at roughly $40 billion — a figure that gives bulls a tangible foundation for their price targets.
Should investors sell immediately? Or is it worth buying Nebius?
A Cascade of Target Hikes
The analyst response to these results has been remarkably synchronized. Within days of the earnings release, four firms raised their price targets in quick succession. Northland Securities’ Nehal Chokshi made the boldest call on Thursday, lifting his target from $248 to $410 — more than double the stock’s level a year ago — while reiterating a buy rating. Citigroup followed on Friday with an increase from $278 to $324, keeping its buy recommendation. Bank of America had raised its target to $310 on August 14, and Robert W. Baird moved to $340 a day earlier.
The stock’s response has been equally emphatic. On Friday, shares climbed 8.4 percent to close at €239.70, capping a seven-day gain of 50 percent. Even by the standards of the current AI rally, that’s an unusual move. The shares remain 8.2 percent below their 52-week high, but they’re now trading 23 percent above their 50-day moving average of €194.10.
The Bear’s Counterargument
Burry’s skepticism isn’t without foundation. The company is burning cash to serve demand it can barely keep up with, and the capital intensity of its strategy is staggering. The annualized volatility of 178 percent tells its own story — this is not a stock for the faint of heart. The relative strength index sits at 64.2, which, while not yet signaling overbought conditions, reflects how quickly the re-rating has occurred.
There’s also a notable detail buried in the company’s own actions: through the end of June, Nebius sold 12.7 million Class A shares at a weighted average price of $223.60 as part of a buyback program, generating gross proceeds of roughly $2.8 billion. Management is using the elevated share price to secure capital for its multibillion-dollar investment plans — a pragmatic move that cuts both ways. It’s smart capital raising, but it also means dilution for existing shareholders.
A Silent Seal of Approval
Adding another layer to the story is Nvidia’s disclosure in mid-July of a passive stake of approximately 9.3 percent in Nebius. The chip giant’s quiet backing reads as a vote of confidence — a company that doesn’t just sell processors but also invests in those who turn them into computing infrastructure.
The company also has a liquidity reserve of $8 billion to help fund its 2026 capital expenditure plans, alongside those customer prepayments.
For now, the standoff between Burry’s warning and the analysts’ enthusiasm remains unresolved. What’s clear is that Nebius represents one of the purest expressions of the AI infrastructure bet: a company spending enormous sums today on the conviction that computing capacity will be the most valuable commodity of the next decade. Whether that conviction is justified — or whether the top of the boom has already arrived — is a question the market hasn’t yet answered.
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