Nebius Group surged after the cloud-computing company posted numbers that broadly beat estimates. Now, the rally may get an extra boost from the very people betting against it.
Nebius delivered eye-watering numbers for the second quarter. The cloud provider posted $582 million in revenue, up 454% from the prior year and comfortably ahead of Wall Street's call for $570 million. Revenue tied to the company's core AI cloud business increased sixfold to $575 million.
Nebius operates as a so-called neocloud, a specialized cloud provider tailored to artificial intelligence and high-performance computing. The stock has won Wall Street's favor amid a flurry of AI spending, emerging as a prime beneficiary with shares nearly tripling this year.
Nebius shares surged over 34% on Wednesday.
The solid numbers came on the heels of similarly strong results from CoreWeave, another neocloud that has ridden the AI boom to growth this year. CoreWeave spiked 19% on Wednesday; counting those gains, the stock has risen over 50% in 2026.
Heavy customer concentration, high capital expenditures, and a hefty debt load have caused some investors to stay sidelined on Nebius. However, the latest quarter's strength may persuade others to set aside caution in favor of the AI boom's upside potential.
Pressure from short sellers may be helping the recent rally. "Shorts" borrow stock and sell it, hoping to repurchase the shares at a lower price and profit from a decline in the value of the stock.
Nebius has attracted significant attention from short sellers including Michael Burry, who famously predicted and profited from the 2008 subprime mortgage crisis. Burry disclosed a short position in Nebius last week at around $211.77 a share, comparing shorting the stock to "shooting fish in a barrel."
He isn't alone. As of the end of July, 60.2 million Nebius shares were sold short, representing nearly 30% of float. Any number above 20% indicates a high degree of short interest.
While this bearish stance reflects a bet that the stock's price will drop, unexpected positive news could force traders to cover their positions, triggering a short squeeze that drives Nebius sharply higher. Judging by the latest earnings, more gains could well be on the horizon.