NBIS reported Q1 earnings this morning into one of the tightest borrow setups of the past year — and the numbers landed well ahead of expectations.
The tension on this stock is sharp right now. A 20%-plus short position, availability at roughly 11% of short interest, and borrowing costs ticking higher all collided with a Q1 revenue beat ($399M versus estimates near $371M) and full-year guidance reiterated at $3.0–3.4 billion. Goldman Sachs reiterated its Buy rating after the print. Shorts are fully deployed against a name that just printed accelerating AI growth.
The borrow market is extremely tight. Availability — the pool of shares still available to borrow relative to outstanding short positions — has been running mostly between 5% and 14% throughout May, meaning fewer than one share is available for every seven already lent out. Utilization hit 100% again this week, matching its 52-week high. Short interest itself holds at just above 20% of the free float, down from a peak near 21.8% in early April when the broader market sold off. The short base is large but has been slowly unwinding — down roughly 6% over the past month — yet availability remains extremely constrained. That combination tells a story of remaining conviction on the short side, but with little room to add.
Borrowing costs, at 0.87% annually, are low in absolute terms and barely constrain new short activity on price. They edged up about 4% on the week, but remain well off the early-April range near 1.25%. What keeps the setup charged is not the cost but the scarcity: those who want to add short exposure have almost no shares to borrow. For existing shorts, covering into a stock up 23% over the past month while availability is this thin is a non-trivial decision. Options positioning is slightly less defensive than usual — the put/call ratio at 0.84 is a touch below its 20-day average of 0.87 — suggesting options traders have not materially added downside protection into the print. That mildly contradicts the high short base; shorts are in, but the options market is not piling on.
The Street is broadly bullish and getting more so. B of A Securities raised its target to $205 from $175 this past Sunday, keeping a Buy rating — a meaningful lift, with the stock trading at $179 at Monday's close. The consensus target sits near $183, implying modest upside from current levels, but the directional tilt across recent coverage actions is clearly upward. Initiations from Cantor Fitzgerald (Overweight), Citigroup (Buy), Compass Point (Buy), and DA Davidson (Buy) have clustered since February. The lone neutral note is Morgan Stanley's Equal-Weight from January, initiated at $126 when the stock was considerably cheaper. Valuation is not cheap — the EV/EBITDA multiple has compressed about 3 turns over 30 days to roughly 16.5x, reflecting price appreciation outrunning estimate revisions. The bull case rests on the Microsoft contract, a projected ARR of $7–9 billion by year-end, and a capital expenditure plan raised to $20–25 billion. Bears flag a weak balance sheet, negative EPS (the trailing PE sits at –95x), and the company's origins as a Yandex carve-out. Today's EPS surprise — adjusted loss of $0.33 versus the –$0.77 estimate — will likely shift some of those conversations.
Insider activity has been persistently one-sided. Director Elena Bunina sold approximately $1M worth of shares on each of three separate days in early May, at prices between $170 and $190. Chief Level Officer Marc Boroditsky sold $720K in mid-April. CEO and CTO sales were also recorded in late March and early April. Net insider sales over the past 90 days total roughly $18M. The selling has been methodical and spread across multiple executives — it reads as planned distribution rather than a single alarmed exit, but the direction is consistent.
The only prior earnings reaction with data on hand is the April 24 print, which sent the stock down 7.7% on the day and down 1.6% over the following five sessions. Today's setup is meaningfully different — the beat is larger and guidance was affirmed — but that precedent is the last concrete reference point for how the stock moves around results. The next scheduled earnings event is July 28. What to watch between now and then is whether short interest begins to compress more rapidly given the Q1 beat, and whether borrow availability loosens as some existing shorts reassess — or tightens further if new short sellers try to initiate into the rallying stock.
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