Nebius (NASDAQ: NBIS) has reached the point where its AI infrastructure story is getting harder to dismiss, and Q2 earnings gave investors plenty of ammunition after revenue jumped 454% year over year to $582.3 million, while adjusted EBITDA swung from a $21 million loss to $236.2 million.
NBIS certainly treated the numbers as something worth celebrating, jumping 34.14% to $259.20 as more than 63.5 million shares changed hands. That is one hell of a reaction for a company whose shares had spent weeks struggling below the $220 area.
But with Michael Burry’s bearish thesis hanging over the AI infrastructure trade, I don’t think investors should rush to declare victory for either side. Nebius is showing some seriously impressive commercial momentum; the more uncomfortable question is how much of that momentum survives once we account for what it costs to build the machine producing it.
More Than $20 Million Of Annual Revenue Per Megawatt
Nebius is starting to show what happens when you have something AI customers badly want and don’t have enough of: pricing power. The company said Q2 AI Cloud deals averaged more than $20 million of annual revenue per megawatt, while pricing for older-generation GPUs was already more than 30% higher than it was in Q1.
That becomes a pretty meaningful development when the deals themselves are getting larger, because four landmark Q2 contracts each carried more than $1 billion in total contract value, while the total value of deals signed during the quarter nearly quadrupled sequentially. In short, Nebius isn’t just filling up racks here, its customers are committing serious money to secure the compute.
The part I really like, though, is what happens before Nebius even has to spend all that money. Roughly 70% of Q2 deals included customer prepayments, covering 50%–60% of the associated capital expenditure. That doesn’t make the billions required to build AI capacity disappear, but it changes the financing equation considerably when customers are willing to put substantial money down for the infrastructure they want.
And that’s beginning to show up in the economics of the business, because NBIS estimates the payback period on its Q2 deals at one year and 10 months, compared with its historical two-to-three-year range. For a company spending billions to build AI infrastructure, getting that capital back faster is not some minor improvement; it can change how aggressively Nebius can keep expanding.
The $5.7 Billion Capex And Michael Burry’s Thesis
Now, for all the excitement around those giant contracts, there is still a pretty uncomfortable number sitting in the middle of this story: Nebius spent about $5.7 billion on capital expenditures in Q2, primarily on GPUs, GPU-related hardware and data-center expansion. That is an enormous amount of money to put to work in a business that reported just $582.3 million of quarterly revenue, which is exactly why the Michael Burry’s depreciation argument hanging over AI infrastructure deserves more than a dismissive shrug.
Nebius recorded $259.7 million of depreciation and amortization during the quarter, equal to roughly 45% of revenue, although the company also extended the depreciable life of its server and network equipment from four years to five. The accounting treatment isn’t automatically wrong, and the earnings materials don’t give us enough to make that accusation, but it does leave investors with a legitimate question: are these assets generating enough cash quickly enough to justify the enormous capital being deployed?
Right now, all I can say is that the commercial evidence is encouraging, particularly with Q2 deal paybacks falling to one year and 10 months, but that has to hold as Nebius scales. That’s where Burry’s argument becomes worth watching rather than simply celebrating or mocking.
NBIS Just Tore Through $220 On 63.5 Million Shares
The chart doesn’t look like a stock that merely enjoyed a good earnings report; NBIS closed at $259.20, up 34.14%, on 63.54 million shares, blasting through the roughly $220 area and its $221.83 50-day moving average in one session. After spending weeks struggling beneath that zone, the earnings candle closed almost at its $259.44 intraday high, which is exactly the sort of price action I’d want to see if this is the beginning of another sustained leg higher rather than a one-day adrenaline shot.
That leaves $220–$222 as the obvious level to watch. If that former resistance now behaves like support, the breakout has some credibility; if NBIS quickly falls back beneath it, particularly after such an enormous volume spike, I’d be much less impressed.
Now Nebius Has To Make The $5.7 Billion Work
The market has already made its choice about Q2, $259.20 says investors are willing to pay up for the possibility that Nebius can turn scarce AI capacity into an extraordinarily profitable infrastructure business. But the next stage is harder, because the company has to keep those customer economics attractive while putting billions more behind GPUs, data centers and capacity.
The encouraging part is that customers are increasingly helping fund that expansion through prepayments, while contract economics are improving and AI Cloud adjusted EBITDA margins have reached 49.7%. The risk is that the capital intensity, depreciation and hardware replacement cycle eventually prove heavier than today’s margins suggest.
That’s why I wouldn’t reduce this to “Burry was wrong.” Nebius has given the bulls a serious operating case; now it needs to prove those economics survive at scale. If they do, this $259 breakout may look less crazy in hindsight. If they don’t, the market has a very long way to come back down.
