Position: 100 shares @ $226.61, 1 x CC Sep04'26 $290 for $19.75/share collected
Not financial advice, I just asked Claude.
TL;DR
AI cloud company growing revenue 454% YoY, Michael Burry's short, stock ripped 34% on earnings anyway. The whole debate boils down to one accounting line item. Read on regard.
The Bull Case 🐂
NBIS is going above and beyond with their AI infrastructure, and a lot of their earnings are prepayments. That means their customers are so confident in their own earnings that they're happy to buy the cloud space years in advance. They just blew through earnings and popped from 190 (post Burry's announcement) to 250 and beyond. Sitting at 266 at time of writing.
See bull points below:
- Q2 revenue: $582.3M, +454% YoY, beat consensus ($572.75M)
- AI Cloud segment specifically: +514% YoY
- Annualized run-rate revenue: $1.25B (Dec) → $1.9B (Mar) → $3.0B (Jun). Acceleration, not deceleration.
- AI Cloud adjusted EBITDA margin: 24% → 45% → 50% over three straight quarters. Real operating leverage showing up.
- Closed four contracts averaging $1B+ each in the quarter
- ~70% of new deals include customer prepayments covering 50-60% of related capex — customers are putting real money down, not just signing speculative multi-year paper
- $8B cash on hand, $2.2B operating cash flow — real cash generation, not vaporware
- Raised full-year contracted power target to 5GW
- Stock up 137% YTD, ~950% over 3 years — momentum is a real force here, shorts are visibly getting squeezed.
The Bear Case 🐻
Michael Burry — the man who predicted 14 of the last 2 market collapses — has gone short and he's done it vocally. His original short was around $211 and he loaded up more at $250. His thesis is about an accounting method and not about the success of the company. Effectively, Burry says the NBIS earnings were padded by favourable depreciation metrics (which they were) but all I see is shorts bleeding. Even if he's right, it'll take years to prove that NBIS is depreciating their servers over too much time.
Claude bullet points below:
- Burry's short isn't a "AI is fake" macro call — it's narrow and specific: depreciation methodology
- NBIS extended server depreciation schedule from 4 years to 5 years at start of 2026
- Q2 D&A: $259.7M = 45% of revenue
- GAAP net loss: -$190.4M for the quarter, even with the extended (friendlier) schedule
- Rough math reversing to a 4-year schedule: D&A jumps to ~$325M, pushing the net loss toward ~-$255M
- The scarier forward number: if Q2's $5.7B capex alone gets depreciated over 5 years, that's $1.1B+ in annual depreciation once fully in service — more than current annualized adjusted EBITDA
- Free cash flow for the quarter was deeply negative (~-$3.5B by simple math), funded by the cash pile + prepayments, not operations
- Burry's applying the same critique across the whole neocloud/AI infra space (Oracle, Nvidia, Palantir, Micron) — this is an industry-wide accounting question, not NBIS-specific doom
- $8.4B long-term debt funding a business still burning serious cash
The Actual Nuance Nobody's Tweeting About
This is not a 3-week thesis. Whether 5-year depreciation is accurate or optimistic won't be provable for another 1-2 years of real-world GPU obsolescence data. Near-term price action is driven by momentum, short-covering, and sentiment — not by anyone resolving a multi-year accounting judgment call. Burry can be early, wrong, or both, and the stock can keep ripping regardless of whether he's ultimately right on the depreciation math.
Risk If Held 2 Years
Real risk isn't "NBIS goes to zero because Michael Burry said a mean thing." Real risk is depreciation schedules across the whole sector get revised down as hardware obsolescence data comes in, compressing reported margins for several quarters even if the underlying business keeps growing just fine. Historical precedent: fast-depreciating infras