QS Research · Michael Burry's Scion Capital analyst template · 2006
SharonAI Holdings Inc. (SHAZ)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +0% · downside -48% · upside +150%
The market is not paying for SharonAI's earnings, because there are none: it pays 132.38x TTM revenue of $3.1M (N18, N6), and the stated -$1.45B enterprise value (N16) only looks like free cash because $1.86B of cash (N15) is set against roughly $6B of contractual purchase and infrastructure commitments (S15) and against $350M and $700M of convertible notes plus a $356M senior secured facility signed 2026-09-28 (S15, S32) that the XBRL tag misses. Operations are improving from a tiny base — Q2 2026 revenue $1,931 thousand, up 412%, gross profit $1,170 thousand (S15) — but TTM EBITDA is -$34.6M (N10) and the -$483.8M TTM net loss (N11) is mostly a $400,441 thousand non-cash convertible fair-value charge (S15), not an operating run-rate. The dated events that would settle the argument, ESDS revenue expected to commence in Q3 2026 (S9) and the $1.32B AI Lab agreement with revenue across Q1/Q2 2027 (S15), have produced nothing visible in any filed quarter yet. Priced on the company's own 132.38x multiple with revenue the only variable, my base is $21.87 (+0.3%), the downside is -48.2% if pricing and customer concentration pull revenue back to the FY2025 base, and the upside is +149.9% if Q2 2026 annualizes — a range too wide and too unresolved to be long or short, so watch.
Key numbers
- Share price: $21.81
- Market cap: $409.1M
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $3.1M
The 15 boxes
- ✓ 1. Long-form business notes
SharonAI is an Australian neocloud selling GPU-as-a-Service, AI Studio PaaS and cloud storage, hosted in partner data centers and sold through NVIDIA, Cisco, Lenovo, direct and research channels. FY2024 revenue was $438,292 and FY2025 revenue $1.6M, but operating loss widened from -$4.0M to -$13.8M and net loss to -$39.6M, while capex rose to $11.0M and cash to $71.1M. Between the oldest and newest annual data, it moved from distributed storage and initial GPU purchases to a certified NVIDIA cloud partner, launched SharonAI Cloud and the Supercluster, signed its first major customers in January 2026, and divested its 50% TCDC data-center JV to become a pure-play neocloud.
- ✓ 2. Competitive advantage
No durable advantage is visible in the sources: FY2025 revenue was $1.6M with gross profit of only $100,807 while operating income was -$13.8M and operating cash flow -$2.6M against $11.0M of capex. SharonAI competes in a global HPC/AI cloud market where the 10-K itself says many participants are larger operators with their own energy infrastructure and equipment supply, and lists Amazon, Alphabet, Microsoft and CoreWeave among the public competitors. Its position is structurally thin: ~82% of 2025 revenue came from 3 customers, substantially all GPU infrastructure sits in NEXTDC facilities under up to 54MW of contracted capacity, and Lenovo statements of work can be terminated on a material adverse change with no matching right against customers. The margin and return history is negative in every year given, so there is no evidence of pricing power, scale or switching costs.
- ✓ 3. 10-Q takeaways
Q2 2026 revenue rose 412% to $1.931 million and gross profit turned positive at $1.170 million, but the operating loss widened to $24.784 million. The $430.369 million Q2 2026 net loss was dominated by a $400.441 million fair-value loss on convertible notes, not by operating results. Cash was about $1.86 billion at June 30, 2026 after large financings and H1 2026 operating cash flow was positive $23.241 million, against roughly $6 billion of purchase and infrastructure commitments; risk factors emphasize NEXTDC dependence, declining GPU pricing and delivery execution.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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