Michael Burry's Short Bet on Nebius Backfires as AI-Driven Stock Jumps 34% in One Day

The Quick Take

• Michael Burry's short position in Nebius — an AI infrastructure company — is under significant pressure after the stock surged 34% in a single trading session following stronger-than-expected quarterly results
• The result represents one of the clearest cases this year of a prominent bear bet on AI sector stocks being squeezed by resilient earnings fundamentals
• Burry's bearish view on AI sector valuations, which positioned him against the ongoing AI infrastructure boom, has been challenged by continued strong earnings from AI companies

Michael Burry, famous for his prescient short of the US housing market ahead of the 2008 financial crisis, has reportedly taken a significant short position in Nebius Group — a Yandex-linked AI infrastructure company that has repositioned itself as a European AI cloud computing provider. German financial media Aktiencheck reports that Nebius posted quarterly results that defied Burry's bearish thesis, sending the stock up 34% in a single session. The move has left Burry's short position deeply underwater and raised questions about the timing and validity of his broader AI sector scepticism at a moment when AI infrastructure companies are delivering meaningful revenue growth.

The broader market implication is a continued validation of the AI infrastructure bull thesis against prominent sceptics. Burry is not alone in questioning AI sector valuations — multiple prominent investors have raised concerns about AI investment sustainability and the ability of AI companies to generate returns commensurate with their capital expenditure. Nebius' strong results represent another data point pushing back against that narrative, with the company demonstrating that European AI cloud infrastructure demand is real and growing. For short sellers positioned against AI-related stocks, continued earnings beats create mechanically painful short-squeeze dynamics, compressing their return profiles while increasing margin requirements.

The forward signal to watch is whether Nebius can sustain its revenue momentum beyond a single strong quarter and whether other European AI infrastructure companies confirm similar demand patterns. The macro variable is enterprise adoption speed for AI cloud infrastructure in European markets — if regulatory headwinds from EU AI Act implementation slow enterprise AI adoption, companies like Nebius face growth headwinds that could eventually vindicate Burry's bearish thesis. Watch for Burry's next 13-F filing for evidence of whether he has reduced or maintained his Nebius short position after the earnings-driven squeeze.

Synthesised from 1 source.