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.
8. Amazon.com Inc. (NASDAQ:AMZN)
Potential Upside: 32.5%
On June 4, Amazon.com Inc. (NASDAQ:AMZN) introduced its Amazon Prime service in South Africa as part of its effort to become one of the dominant retailers in the country. With its high demand, the company priced the Prime membership in the new market at $3.62 per month or $24.47 per annum. Amazon Prime services in South Africa offer many of the same benefits available in other countries, including fast free delivery, access to Prime Video, gaming perks through services like Amazon Luna, and access to flagship events such as Prime Day.
The company offers same-day delivery in bigger cities such as Cape Town, Johannesburg, and Pretoria. Amazon was launched in South Africa two years ago, and it was the gateway to the African continent in the context of the company’s wider global expansion strategy. The e-commerce giant believes the online shopping market has increased enough for Prime to attract more customers and increase market share. The company leadership remarked,
“Since launching Amazon in South Africa two years ago, we have built a store our customers love, with a great selection of local and international products backed by a reliable delivery experience. Launching Prime is the next exciting milestone on our journey in the country, deepening our commitment to becoming a meaningful part of South Africans’ daily lives by offering even more convenience, savings, and entertainment.”
Amazon.com Inc. (NASDAQ:AMZN) operates across e-commerce, digital content, advertising, and cloud computing. Its online and offline stores offer both in-house and third-party products, while its Amazon Web Services (AWS) division runs one of the world’s largest data center networks.
7. Oracle Corporation (NYSE:ORCL)
Potential Upside: 33.1%
On June 11, Oracle Corporation (NYSE:ORCL) secured a $395.8 million contract from the U.S. Office of Personnel Management. Under the agreement, the company will deliver a new government-wide human resources platform based on its Oracle Fusion Cloud Human Capital Management software. The platform will support OPM’s Federal HR 2.0 initiative and is expected to replace more than 100 separate HR systems currently used across federal agencies. It will serve as a single, centralized system of record for managing workforce data and HR operations across the federal government.
The news came as Oracle Corporation (NYSE:ORCL) reported its fourth-quarter earnings on June 11. The company reported 21% revenue growth, with revenue reaching $19.2 billion. Non-GAAP operating income reached $8.6 billion, growing 22% in U.S. dollars. Oracle’s Remaining Performance Obligations (RPOs) increased to $638 billion from $553 billion in the previous quarter. It is this high visibility into future earnings that makes the stock one of the top stocks that could skyrocket on the neocloud boom.
Going forward, Oracle Corporation (NYSE:ORCL) expects the first-quarter total revenue to grow between 27% and 29% in U.S. dollars. Cloud revenue is projected to grow in a range between 58% and 64%.
Oracle Corporation (NYSE:ORCL) provides information technology-related products and services to enterprises through its main business segments: Cloud and License, Hardware, and Services. The company is based in Austin, Texas, and was founded in June 1977 by Lawrence Joseph Ellison, Robert Nimrod Miner, and Edward A. Oates.
6. Microsoft Corporation (NASDAQ:MSFT)
Potential Upside: 40.9%
On June 11, Wells Fargo analyst Michael Turrin maintained his Buy rating on Microsoft Corporation (NASDAQ:MSFT) stock and a price target of $650. As a relatively underperforming hyperscaler, the upside in Microsoft stock continues to be attractive. The company is one of the largest drivers of AI infrastructure spending and could be a huge beneficiary once its AI ecosystem is set up.
Last month’s collaboration between Nscale and Microsoft was one example of how the tech giant is benefiting from the neocloud boom. On May 5, Nscale announced its plan in collaboration with Microsoft Corp (NASDAQ:MSFT) to spend approximately $812 million on infrastructure in Portugal. Neocloud provider Nscale installed more than 12,600 powerful Nvidia Blackwell Ultra AI chips for Microsoft at a data center in Sines, Portugal. This investment of $812 million is one of the most significant AI infrastructure projects in the EU and one of the largest in Portugal to date. Nscale’s CEO Josh Payne remarked,
It also represents one of the largest AI infrastructure investments in Portugal’s history and among the most significant in the EU, reflecting the surging demand we’re seeing for Nscale’s services.
Alongside its major investment in OpenAI, Microsoft is also expanding the physical infrastructure needed to support the growing AI industry.
Microsoft Corporation (NASDAQ:MSFT) is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide. Its flagship products include Windows, Microsoft 365, Azure, LinkedIn, and Xbox.
While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about the cheapest AI stock.
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