🤖 Burry Shorted the Wrong One

Good morning to everyone who saw the Burry headline and hit sell.

Michael Burry, the investor who called the 2008 housing crash, bet against $NBIS ( ▼ 9.87% ) at $211.77 on August 6 and called it "like shooting fish in a barrel."

The stock closed at $187.44. Earnings land Wednesday.

Today, the number Burry didn't check before he pulled the trigger.

AI is moving from experiment… to essential.

Every major industry is integrating it.
Every major company is investing in it.

By late 2025, AI was already an $800B market — growing at a pace that could push it well beyond $1 trillion in the years ahead.

Cloud infrastructure is scaling fast.
AI-enabled devices are multiplying.
Automation is becoming standard.

But here’s the real question…

When trillions flow into this transformation — which stocks stand to benefit most?

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Burry announced the short on his Substack, alongside a bet against $ORCL ( ▲ 0.71% )

He wins if the stock falls.

He wanted to use put options, which cap what you can lose.

They were too expensive, the market was pricing in swings of over 100%.

So he shorted the shares instead, a trade with no ceiling on his losses.

His case has two legs.

Long-term borrowings more than doubled to $8.4 billion, and 2026 spending guidance rose to $20–25 billion from $16–20 billion.

When a company buys chips, it spreads the cost across the years it expects to use them.

Burry says those chips die in 2 or 3 years while the books pretend they last 5 or 6.

And Nebius handed him ammunition.

In Q1 2026 it stretched the assumed life of its servers from 4 years to 5, cutting about 20% off the cost it reports each year.

Institutions moved the other way, hitting record ownership just as the short went public.

Here's what he missed.

Something big is coming to Second Order! 🤖

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Burry found an accounting scandal at the company with the strictest accounting in its sector.

Stretching an asset's life makes today's profits look bigger. That's the trick he's hunting.

But Nebius spreads its chips over 5 years. CoreWeave uses 6.

Most hyperscalers (companies in the same sector) use 5 to 6.

Nebius was the strictest at 4 and only moved to the middle.

He picked the least guilty company in the room.

Now the part the short has no answer for.

Stretching depreciation only flatters profits if nobody is paying you in year 5. Nebius already sold year 5.

It holds $40 billion of revenue under signed contracts, at a company worth $48 billion.

Microsoft prepaid nearly $7 billion before delivery.

Meta's $27 billion deal includes $15 billion where Meta must buy whatever capacity Nebius can't sell to anyone else.

That last clause is the whole ballgame. If the chips go stale, that's Meta's problem.

Even Goldman raised its 2030 revenue estimate 61% to $35.5 billion.

So what does this mean for your portfolio?

The question was never which name Burry shorted. It's whether a company has customers signed for the chips it's buying.

The AI cloud names stacking up GPUs with nobody committed to rent them are where his math lands.

Nebius isn't one of them.

In other words, Burry isn't wrong about the chips depreciation problem. He's wrong about who's holding them.

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Any tickers or companies mentioned are our opinions, not recommendations to buy or sell.

Do your own research and consult a professional before making investment decisions.