Michael Burry, famous for predicting the 2008 housing collapse, revealed he is shorting tech giants Oracle (ORCL) and Nebius (NBIS). Writing on his Substack platform, Burry explained that his research into the artificial intelligence boom forced him to take bearish bets against both companies.
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Two ETFs for long or short leverage on NBISComparing AI firms taking on large amounts of debt to “fish in a barrel,” Burry warned that these firms are locking themselves into huge future payments for unstarted leases and hardware orders. He noted, “The fish have gotten very fat, very large, easy to shoot,” adding that firms could soon stumble under the weight of their liabilities.
Oracle Faces Debt Burdens from Its Data Center Spending
Burry re-entered a direct short position on Oracle around $145 per share. Oracle shares previously jumped toward $350 during last year’s AI rally before pulling back significantly over growing market concerns about data center debt burdens.
While Oracle’s future contract backlog grew 363% over the past year, Burry remains skeptical about its long-term financial path. He previously called Oracle’s large spending strategy “a Homeresque own goal by a modern deity,” arguing that the software firm took on unnecessary financial risks to chase cloud growth.
High Costs and Long Leases Cloud Nebius Outlook
Burry also disclosed a larger direct short bet against Nebius, an AI cloud infrastructure provider, at roughly $212 per share. Nebius shares dropped 13% following his disclosure, though the stock has still doubled this year on strong demand for cloud processing power.
Nebius reported strong quarterly revenue growth, but Burry warned that high facility costs and long data center leases create severe execution risks. He noted that direct stock shorts were preferable to option contracts because market volatility made put options overly expensive.
Is Oracle or Nebius the Better Buy?
Despite short-sellers taking a cautious stance, data from the TipRanks Stock Comparison tool shows that Wall Street analysts remain optimistic about the long-term outlook for both tech companies.
Nebius holds a Moderate Buy rating from Wall Street analysts alongside a Smart Score of 7 out of 10, with its average price target of $241.00 pointing to nearly 31% potential upside from its $184.11 trading price. Oracle carries an even stronger Strong Buy consensus rating, and while its Smart Score sits lower at 5 out of 10, its average price target of $258.50 implies a price jump of more than 71% above its current $151.05 level.
