Burry's AI Shorts Bleed as Nebius Surges 34%, Palantir Jumps 35%

Michael Burry's AI short thesis is under pressure as Nebius surged 34% and Palantir climbed 35% in a month.

Nebius Group shares surged 34% to $259.20 after a blowout second quarter, while Palantir Technologies climbed 35% in a month, hammering Michael Burry's disclosed short positions in both stocks.

"Demand for AI sovereignty has now been unleashed," Alex Karp, chief executive officer of Palantir, said. "This quarter was otherworldly: our U.S. commercial revenue grew 149% year-over-year."

Nebius posted Q2 2026 revenue of $582.3 million, up 454% year over year, with AI Cloud revenue climbing 514%. Annualized run-rate revenue hit $3 billion, and the company raised its year-end 2026 contracted power target to 5 gigawatts. Palantir reported Q2 revenue of $1.935 billion, up 92.8%, with adjusted EPS of $0.41 beating the $0.28 consensus — its ninth consecutive beat.

The moves cut at the core of Burry's neocloud short thesis, which argues GPU depreciation runs faster than operators model. Nebius disclosed new pricing initiatives in early Q3, including its first-ever auction and short-term capacity deals, with a price opportunity of $40 million to $50 million per megawatt and a payback period of one year and 10 months, down from two to three years previously.

The Depreciation Argument Meets a Counterexample

CoreWeave added to the pressure on the bear case. Its stock rose 19% to $107.73 after the company said on its earnings call Tuesday that A100 contracts — an NVIDIA chip first released in 2020 — are being signed through 2029, indicating a nine-year-old GPU still commands meaningful economics well past its assumed depreciation window. NVIDIA gained 3% on the day.

If GPU useful life extends deeper than skeptics assume, the reported margins at Nebius and CoreWeave look more durable, not less. The bear case is not dead: Nebius still posted a $190.4 million net loss on $5.66 billion in quarterly capex, and Palantir's valuation remains stretched at a $393.5 billion market cap.

The Newsletter Business Thrives

Burry's trading losses contrast with the success of his Substack newsletter, "Cassandra Unchained," which crossed 300,044 subscribers within 231 days of its November 2025 launch. At $379 per year, the theoretical annual revenue is about $113.7 million — more than triple the roughly $34 million an investor would have earned putting $1 million into the 10 best-performing S&P 500 stocks this year, according to Stocktwits.

The newsletter has become Burry's primary platform for disclosing positions. He has built long positions in PayPal, Lululemon, Alibaba and JD.com while expanding shorts in NVIDIA, Micron, Applied Materials and Palantir. Micron has surged 697% year to date, AMAT is up 206%, and NVIDIA has gained 29%, versus a 22% rise in the S&P 500 ETF and a 31% gain in the Nasdaq 100 ETF.

The pressure on Burry's shorts resets the burden of proof on his depreciation thesis. Investors will watch whether Nebius holds its gains into next week, whether Palantir reclaims its recent highs, and whether Scion's next 13F shows any change in positioning.

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