Michael Burry Disagrees with ChatGPT's Bullish View on Nebius

Michael Burry, known for predicting the 2008 housing market crash, has expressed skepticism towards Nebius (NASDAQ: NBIS), an AI infrastructure company. Burry believes that the stock's current growth is based on assumptions that may not be sustainable in the long term due to concerns about its compute contract pricing.

The stock has seen significant gains, with a year-to-date increase of nearly 210% and a 280% rise over the past year. Despite this, Nebius recently reported impressive financial results, including a 454% year-over-year revenue growth and a positive adjusted EBITDA of $236.2 million.

In contrast, ChatGPT, an AI model, has added Nebius to its top holdings, with returns of 141.6% since the AI's investment. The company operates data centers equipped with high-end GPUs and rents out computing power for AI model training and operation.

However, Burry questions the market's valuation of near-term AI capacity, suggesting that it may be overvalued given potential future supply increases. He also notes that Nebius's decision to extend its server depreciation schedule from four to five years could indicate a belief in decreasing compute value over time.

While Nebius has shown strong financial performance, Burry's concerns about pricing and valuation highlight potential risks for investors.