Nebius Q2 earnings test $7B ARR bridge as Burry short looms

Nebius shares fell 1.49 percent to EUR 162.56 despite a $1 billion Reflection AI deal, as Burry's short and Q2 earnings loom.

"Everything we build, we sell, and we are still in the very early days," Arkady Volozh, chief executive of Nebius, said on the Q1 earnings call.

Q1 revenue surged 684 percent to $399 million, with the AI infrastructure segment up 841 percent to $390 million. Adjusted EBITDA reached $129.5 million on a 32 percent margin, but the company posted a net loss of $100.3 million. Nebius raised full-year capex guidance to $20-25 billion from $16-20 billion and now targets over 4 gigawatts of power capacity, up from 1 gigawatt.

The August 12 report will test whether Nebius can bridge from $1.92 billion in annualized run-rate revenue at Q1 exit to $7-9 billion by year-end — requiring roughly $1.69 billion in new ARR each quarter for three consecutive quarters. The options market prices a 15.9 percent move around the print, with puts trading at a 13.6 percent premium to calls.

Burry disclosed his short position at $211.77 per share on August 6, arguing that AI infrastructure players are inflating profits by depreciating graphics processors too slowly. The disclosure knocked Nebius shares down roughly 10 percent to around $197, adding to a July decline of 31.1 percent. DA Davidson cut its price target from $250 to $175 on August 6, keeping a Neutral rating, while Piper Sandler initiated coverage at Neutral with a $224 target.

Consensus expectations call for Q2 revenue of $574.65 million and a loss of $0.53 per share. To hit the midpoint of management's full-year guidance of $3.0-3.4 billion, Nebius would need to average roughly $934 million in quarterly revenue across the remaining three quarters. The stock trades at approximately 14 times forward sales versus a sector average of 3.3 times.

Nvidia's Lock-Up Adds a Second Overhang

Nvidia's 9.3 percent stake in Nebius — 22.3 million shares, of which 21.1 million sit under a pre-funded warrant acquired on March 11 — becomes sellable on September 11, 30 days after the earnings print. The options market is pricing downside protection at a 13.6 percent premium to calls, with implied volatility at 120.5 percent, in the 89th percentile over the past year.

The stock remains 37.72 percent below its 52-week high reached in June, though it is still up 121.17 percent year-to-date. The relative strength index sits at 45.4, with the price below its 50-day moving average. A strong print that confirms raised capacity and revenue guidance could blunt Burry's argument; wider-than-expected losses would likely reignite the debate over whether AI infrastructure valuations have run ahead of reality.

The August 12 report will determine whether Nebius's two parallel realities — a business scaling at breakneck speed and a stock under intense short-selling pressure — converge. Investors will also watch for signals on the Nvidia warrant ahead of the September 11 lock-up expiry.

This article is for informational purposes only and does not constitute investment advice.