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QS Research · Michael Burry's Scion Capital analyst template · 2006

Nebius Group N.V. (NBIS)

As of 2026-11-02 · 11/15 boxes filled from SEC filings and market data

Conclusion: SHORT

Conviction low · base case -65% · downside -77% · upside -29%

Even after updating to TTM revenue of $1,355.1M (H2 2025 $373.8M + H1 2026 $981.3M), NBIS trades at $148.56 ($37.59B market cap) while profitable comps support only 6.82x-10.89x EV/Sales. My base case applies a generous 10x EV/S to TTM revenue: EV $13.55B less $0.45B net debt = $13.10B equity, or $51.78/share (-65%); downside at 6.82x gives $34.75 (-77%); even an upside 20x gives only $105.35 (-29%). Normalized EBIT ($-235.6M) and FCF ($-530.7M) are negative, with FY2025 EBIT -$611.7M and FCF -$3.68B, so the current price embeds 2027 execution that a deep-value investor won't pay for. The problems—capital intensity, dilution, no GAAP profitability—look structural, not temporary, so I am short.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    Nebius Group N.V. is a post-divestment AI cloud platform: after selling its Russian internet businesses in July 2024 (which were >95% of consolidated revenues, assets and employees at that time), it operates Nebius AI cloud, Avride autonomous vehicles/robots, and TripleTen edtech, plus stakes in ClickHouse and Toloka. Revenue collapsed from $4.79B in FY2021 to $13.5M in FY2022, then rebuilt to $529.8M in FY2025, while operating losses widened to -$611.7M in FY2025 as capex hit $4.07B. The AI cloud earns from GPU compute, storage, MLOps/AIOps (including token-based Token Factory), and in 2025/early 2026 signed multi-billion-dollar contracts with Microsoft and Meta. As of Dec 31, 2025 it had ~170 MW active data-center power capacity and ~1,500 employees; by Feb 2026 contracted power exceeded 2 GW.

  2. ✓ 2. Competitive advantage

    Nebius lists operational advantages—full-stack AI-native cloud, NVIDIA Cloud Partner status, in-house hardware and a strong balance sheet—but the sources show no durable competitive advantage yet. Revenue collapsed from $4.79B in FY2021 to $13.5M in FY2022, and though it rebounded to $529.8M in FY2025, operating income has been negative every year since FY2021, widening to -$611.7M in FY2025. It faces intense competition from hyperscalers and AI-native providers, and its own risk factors state the businesses have never been profitable and may never reach profitability.

  3. ○ 3. 10-Q takeaways

    Q2 2026 revenue grew 454% y/y to $582.3m, and adjusted EBITDA turned positive at $236.2m, but net loss from continuing operations was $(190.4)m versus a year-ago gain, with adjusted net loss narrowing to $(33.2)m. Operating costs more than tripled to $758.2m (130% of revenue) and capex surged to $5.66bn as the company builds AI capacity. Operating cash flow turned strongly positive at $2.25bn; no numeric guidance was provided.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ○ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ✓ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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