Nebius Group stock surged 34% on August 12 following the release of its second-quarter financial results. The Amsterdam-based company, an Nvidia-powered AI cloud provider spun out of Russian internet giant Yandex, reported Q2 revenue of $582.3 million. This figure represents a 454% increase year-over-year and comfortably surpasses analyst estimates of $572.75 million.

However, the exceptional earnings report did not alter the bearish stance of prominent investor Michael Burry. The Scion Asset Management founder, well-known for predicting the 2008 housing market collapse, increased his short position in Nebius on the exact same day the results were published. Burry has reportedly characterized the company as “what the top of a boom looks like.”

Burry initially disclosed his short position on August 6 when Nebius shares were trading around $212. Following the earnings-driven rally, the stock closed near $259 on August 12, leaving his short position effectively underwater.

Strong Q2 Financial Performance

Nebius posted AI cloud revenue of $575 million, representing a massive 514% year-over-year jump. During the quarter, the company finalized four major contracts, each averaging more than $1 billion in total contract value. Furthermore, new customer contract value expanded by more than nine times compared to the immediately preceding quarter.

The company concluded June with $8 billion in cash and generated $2.2 billion in operating cash flow. Capital expenditures for the period reached $5.7 billion, notably exceeding analyst projections of $4.7 billion. Additionally, Nebius raised its 2026 contracted power target to 5 gigawatts, up from the prior target of 4 gigawatts — a significant benchmark given that power availability has become a primary constraint on AI data center expansion across the industry. Through June 30, the company sold 12.7 million shares at an average price of $223.60.

In a recent letter to shareholders, CEO Arkady Volozh expressed strong confidence in the company's trajectory, stating: “We could sell our entire 2027 capacity on these terms today.”

Burry’s Focus on Depreciation Accounting

Burry’s short thesis fundamentally does not question the actual demand for AI infrastructure. Instead, his argument heavily targets how companies in the sector account for hardware depreciation. He contends that these firms artificially inflate their profits by extending the assumed useful life of vital components like chips, which realistically cycle out and need replacement every two to three years.

At the beginning of 2026, Nebius lengthened its server depreciation timeline from four years to five years. Burry has explicitly cited this specific accounting adjustment as a tactic that flatters earnings across the broader AI sector.

In Q2, Nebius reported depreciation and amortization expenses of $259.7 million, equating to 45% of its total revenue. On a GAAP (Generally Accepted Accounting Principles) basis, the company recorded a loss of $190.4 million for the quarter.

Broader Market Moves and Valuation

Alongside Nebius, AI infrastructure peer CoreWeave saw its shares jump more than 19% on August 12 after raising its full-year financial forecasts. Both companies belong to a wave of specialized AI cloud providers — sometimes called neoclouds — that have rapidly scaled to meet demand from AI developers needing dedicated GPU clusters outside traditional hyperscaler environments.

On the same day, Burry also expanded his short positions in Micron and Oracle. His current roster of short positions includes other major technology and industrial players such as Nvidia, Palantir, Applied Materials, and Caterpillar.

Trading near $259, Nebius is valued at approximately 20 times its guided 2026 revenue range of $3.0 billion to $3.4 billion. A key near-term test for the company will be whether its pricing power holds; Nebius recently signed its first short-term capacity agreement in early Q3 at a rate of $40 to $50 million per megawatt.