The neo cloud boom has emerged as the most attractive second-order theme of the AI infrastructure spending. While companies like Amazon, Alphabet, and Microsoft drove the bulk of the initial AI CapEx wave, the spending has now spilled into specialized neocloud providers. These are companies that effectively build or lease data centers to rent out the compute capacity and fulfill the increasing demand for compute, spurred by AI workloads. The demand is so high that these companies have seen a meteoric rise in their share prices.
The positive sentiment isn’t just coming from market participants. The neocloud market is expected to grow from $42 billion this year to over $253 billion by 2030, as per the latest estimates from the research firm Research and Markets. This translates to a CAGR of over 56% and explains some of the stock price action in these companies over the last year. CoreWeave CEO Mike Intrator also highlighted this demand last month when he appeared on CNBC’s Squawk on the Street to discuss the company’s progress. He said:
When you talk to Anthropic and OpenAI and Perplexity and all of these different folks, they’re talking about this incredible demand that they’re seeing. The way I look at it is we’re getting hit by this wall of demand from our existing customers.
This demand shows no signs of slowing down. With hyperscalers unable to fully meet AI demand, these neocloud companies offer power-dense, readily deployable capacity. Initially dubbed GPU-as-a-Service, investors now realize these companies are evolving into multi-gigawatt, contract-backed AI infrastructure. This shift in sentiment is likely to drive the stocks of such companies higher, which is why we decided to come up with our own list of the top 10 stocks that can still skyrocket on the neo cloud boom.
Our Methodology
To come up with our list of 10 stocks that can still skyrocket on the neo cloud boom, we looked at stocks in the high-performance computing value chain across various ETFs and financial media. We only considered stocks with a market cap of at least $2 billion and analyst upside of at least 25%. These companies have also reported recent investor-worthy news and are ranked in ascending order of potential upside by Wall Street analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Note: All share price data in the article is as per market close on June 11.
10. Modine Manufacturing Company (NYSE:MOD)
Potential Upside: 25.4%
On June 1, Roth Capital raised the firm’s price target on Modine Manufacturing Company (NYSE:MOD) to $341 from $263 and reaffirmed a Buy rating on the stock. The upward price target revision reflects 22% upside from the current levels. The company impresses the market by delivering unique cooling solutions for the growing data center market. This positive sentiment came right after the latest earnings report.
On May 27, Modine Manufacturing Company (NYSE:MOD) posted its Q4 fiscal 2026 earnings. The company reported revenue of $954.4 million, which comfortably beat the Wall Street consensus of $907 million. The earnings per share came in at $1.71, which exceeded analysts’ estimates of $1.57. Free cash flow for Q4 was positive $153 million.
Going forward, the company has a positive outlook for fiscal 2027. Modine Manufacturing Company (NYSE:MOD) expects EPS ranging from $1.10 to $2.21. Revenue is expected to reach between $1.8 billion and $2 billion in the data center segment alone.
Modine Manufacturing Company (NYSE:MOD) operates as a manufacturer, engineer, designer, tester, and seller of mission-critical thermal solutions. The company’s product portfolio includes heat transfer products, data center products, powertrain cooling products, and coatings products & application services. It was founded in 1916 and is based in Racine, Wisconsin.
9. Vertiv Holdings Co. (NYSE:VRT)
Potential Upside: 27.6%
On June 5, Bank of America Securities analyst Andrew Obin reaffirmed a Buy rating on Vertiv Holdings Co. (NYSE:VRT) stock. While the analyst hasn’t assigned a price target, according to CNN’s compilation of analyst price targets, VRT stock has a median target price of $378, which reflects a further 27% upside from the current share price.
Previously, on May 15, Loop Capital initiated coverage of the provider of data center infrastructure and services, laying out its bull thesis in detail. According to the firm, Vertiv is a leading company in data center power and cooling technology. Loop analyst Ananda Baruah believes the company is well-positioned to benefit from the growing demand for AI infrastructure. The company’s revenue from AI data centers is expected to grow 7x between 2023 and 2028. As the AI infrastructure boom is still in its early stages, many investors do not realize how much demand there could be for Vertiv in the future. The analyst believes the digital infrastructure company has a huge growth opportunity as new AI companies rush to book data center capacity.
Vertiv Holdings Co. (NYSE:VRT) is an electrical equipment & parts company that specializes in critical digital infrastructure technologies & life cycle services for data centers and communication networks.
