#9. Nebius Group N.V. (NASDAQ:NBIS)
Analyst Upside: 78.66%
30-Day Decline: 29.95%
Short Interest: 17.66% of Float
Number of Hedge Fund Holders: 86
Nebius rents AI computing capacity, but building that capacity consumes cash long before the GPUs earn their keep. That exposure made October’s renewed rate-hike worries particularly damaging as its shares fell 30.0% over the month. Second-quarter spending on property, equipment and intangible assets was $5.66 billion against $2.25 billion of operating cash inflow, leaving a $3.41 billion gap before other investing and financing flows.
There is real demand behind the expansion as cloud revenue accounted for $575 million of the group’s $582.3 million quarterly sales, and group revenue increased 454%. Bulls expect newly commissioned capacity to turn that demand into recurring revenue. Nebius is also pursuing partner-owned facilities and hardware, which could let it expand without funding every asset itself. Partners fund and own the hardware, thereby reducing Nebius’s capital requirements; its returns depend on the fees, revenue share and capacity commitments in each agreement. Our analysis tests when that trade-off improves returns and when it leaves too little cash for shareholders.
Q2 hedge fund holders increased to 86 from 60, but Orbis cut its share count by about 22% to 6.49 million. Its remaining $1.79 billion position still represented 6.16% of its reported 13F portfolio at June-end. Broader ownership therefore coexisted with a major holder reducing exposure. September 30 short interest was 17.66% of float, potentially including convertible hedges. Analysts are also retreating, with Piper Sandler cutting its target from $237 to $185 on October 21, well below the $283.60 average.
#8. Seagate Technology Holdings plc (NASDAQ:STX)
Analyst Upside: 80.49%
30-Day Decline: 31.75%
Short Interest: 3.08% of Float
Number of Hedge Fund Holders: 131
Seagate’s 31.8% decline reflects a threat to the pricing power that made its recent earnings so strong. Reports of Toshiba planning more hard-drive capacity unsettled storage stocks in early October, followed by a broader sector selloff. If additional supply loosens the shortage, Seagate could ship more storage while earning less on each unit.
Its technological advantage gives bulls a reason to look past that risk. Mozaic drives use heat-assisted magnetic recording to pack more data onto each disk. Higher density allows cloud customers to store more data within their physical footprint, making product improvements valuable when industry demand slows. Fiscal fourth-quarter GAAP gross margin reached 52.3%, versus 37.4% a year earlier. Protecting that gain as competitors expand is central to the recovery case.
Hedge fund holders climbed from 93 to 131 in Q2. AQR increased its Seagate share count by 24.4% to 1.25 million while trimming Western Digital by 15.0%. The same manager moved in opposite directions within storage. Short interest was 3.08% of float on September 30, before the Toshiba reports; these figures capture positioning before the latest competitive scare.
Seagate also generated $3.1 billion of fiscal 2026 free cash flow and retired $1.4 billion of debt. A storage downturn would put that cash to the test. Our Seagate cash-flow stress test examines whether dividend payments and debt reduction can both survive weaker cash generation.
#7. Celestica Inc. (NYSE:CLS)
Analyst Upside: 82.27%
30-Day Decline: 28.14%
Short Interest: 3.90% of Float
Number of Hedge Fund Holders: 63
Celestica’s bull case rests on selling more of the networking and computing systems that cloud customers need, while keeping a larger share of each sale. Q2 revenue rose 62% to $4.70 billion and adjusted operating margin improved from 7.4% to 8.2%. Management raised its 2026 revenue forecast to $20.5 billion and expected 2027 growth to exceed this year’s projected 65%, with adjusted earnings growing faster still.
Those expectations also explain the vulnerability ahead of late-October earnings. The shares fell 28.1% as investors reduced exposure to AI hardware suppliers. Customer deployment delays can push shipments into later quarters, while manufacturing costs remain. An 8.2% adjusted operating margin leaves only $8.20 of operating profit per $100 of revenue, making cost overruns and weaker product mix consequential. That sensitivity also matters when choosing among AI suppliers: our Arista–Vertiv comparison tests how the same margin squeeze produces different profit declines.
Hedge fund participation narrowed to 63 holders in Q2 from 67 in Q1, but the largest positions did not move together. D. E. Shaw increased its share count by about 89% to 1.88 million, while Arrowstreet reduced its holding by about 31% to 1.52 million. Shares sold short rose 14.9% between September settlement dates, reaching 3.90% of float. These earlier positions offer less reassurance than the $473.91 consensus target — the operating forecasts still have to survive the next customer-spending update.
