Shares in leading AI cloud companies CoreWeave (CRWV), Nebius (NBIS), and Iren Limited (IREN) are all up about 3% in Thursday’s pre-market session.
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Forget margin or options. Here's how the pros trade CRWVThis follows the latest earnings beats from tech giants Alphabet (GOOGL), Amazon (AMZN), Microsoft (MSFT), and Meta (META), which put the spotlight on elevated spending on AI infrastructure.
Why Neocloud Shares Are Up
CoreWeave, Nebius, and Iren function as neo-cloud companies that supply extra cloud computing capacity required by these hyperscalers to supplement their own systems and meet massive AI workload demands. These companies are also traded as proxies for the AI infrastructure theme.
As a result, the trio benefits from the boom in AI capital expenditure among the tech majors. For instance, CoreWeave earlier this month expanded its collaboration with Meta in a $21 billion deal to supply AI cloud capacity to the tech giant through December 2032.
Big Tech Doubles Down on AI Spend
The latest earnings results indicate that Big Tech companies remain committed to spending massively on AI infrastructure, including cloud computing hardware and chips, despite worries about when the investments will start to pay off.
For instance, Microsoft is looking to further increase its AI spending by 194%, from $64.55 billion in fiscal 2025 to $190 billion by the end of the current fiscal year. The tech giant recently entered a $9.7 billion deal with Iren for access to chipmaker Nvidia’s (NVDA) graphics processing units.
Similarly, Amazon — which signed a $5.5 billion contract with neocloud contender Cipher Mining (CIFR) in November — is still on track to spend $200 billion in 2026. This means it will commit roughly 52% more in capital expenditure than it did last year.
Which Is the Best Neocloud Stock to Buy?
Despite its Moderate Buy consensus rating from analysts, Iren (IREN) offers the biggest upside of about 71% compared to the other three neocloud companies. This is based on an average price target of $73.30, TipRanks Stock Comparison tool shows.
