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 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 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 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. 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. 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 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 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 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 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 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.
5. CoreWeave Inc (NASDAQ:CRWV)
Potential Upside: 46.2%
On May 28, CoreWeave Inc (NASDAQ:CRWV) launched unified agentic AI features that help AI systems work independently and efficiently. These features will help AI models to learn from their own outputs and improve over time. The company believes that with reinforcement learning, production inference, and agent observability, agents not only become more reliable but also enhance capabilities.
Moreover, CoreWeave closed the loop between training and inference for enterprises. Chen Goldberg, executive vice president of Product and Engineering at CoreWeave, remarked,
“Enterprises that put agents in production first and let them continuously improve from real-world experience aren’t just building more reliable AI, they’re accelerating the path to superintelligence.”
Furthermore, CoreWeave has brought together several AI tools into one platform. This has made it easy for companies to train, run, and monitor AI agents more easily. Despite these developments, on June 8, Bernstein analyst Madison Rezaei reaffirmed a Sell rating on CoreWeave Inc and assigned a target price of $67. The price target reflects 30% downside from current levels. The firm’s bearish view does not align with the median value on Wall Street, which reflects 46% upside from the current share price.
CoreWeave Inc is a cloud infrastructure technology company in the US. It offers its product, the CoreWeave Cloud platform, which helps businesses manage large-scale AI systems more efficiently. The company also provides services like GPU and CPU computing, data storage, networking, and AI development tools. It was founded in 2017 and is based in Livingston, New Jersey.
4. Nvidia Corporation (NASDAQ:NVDA)
Potential Upside: 46.4%
According to CNN’s compilation of analyst price targets, Nvidia Corporation (NASDAQ:NVDA) stock has a median target price of $300, which reflects a further 46% upside from the current share price. The AI tailwind has strengthened as the use of AI agents increases, reflecting positive analyst sentiment regarding accelerated computing stocks.
NVIDIA continues to dominate GPU shipments over its main rival, AMD. The company sees increasing demand for its Grace Blackwell systems, including the GB300 and B300. The demand continues to grow despite several customers indicating that these are becoming more difficult to source. Wedbush analyst Matt Bryson recently remarked,
“We do not recall availability issues this late in an NVDA accelerator cycle since Ampere/Hopper, a result that to us suggests demand is lifting at a more rapid pace than previously expected.”
The firm believes NVIDIA is best situated in the entire technology ecosystem in terms of current supply chain positioning. Despite supply constraints, which remain a primary reason for availability issues, the company moved ahead of its rivals in acquiring DRAM and HBM supply for 2026 and has likely already done the same for 2027.
NVIDIA Corporation is a fabless semiconductor and AI computing company that designs GPUs, AI accelerators, Application Programming Interfaces (APIs), and system-on-a-chip units. Through its CUDA ecosystem, the company enables industries ranging from autonomous vehicles to scientific research by advancing AI, accelerated computing, and data center infrastructure.
3. IREN Ltd (NASDAQ:IREN)
Potential Upside: 49.9%
On June 3, IREN Ltd (NASDAQ:IREN) reported that it had signed a transmission connection agreement for an 800 megawatt data center in South Australia. This is the company’s first data center in Australia and shows how the firm is aggressively expanding its data center footprint. The news comes after it already collaborated with Dell to acquire Blackwell GPU systems for its data centers.
This isn’t the only partnership the company has announced recently. On May 11, JP Morgan raised the firm’s target price on IREN Ltd to $46 from $39 and reiterated an Underweight rating on the stock. The upward price target revision came after the company announced a partnership with NVIDIA on May 7.
As part of the partnership, both companies plan to accelerate the deployment of next-generation AI infrastructure. Up to 5 gigawatts of Nvidia DSX-aligned AI infrastructure will be deployed across IREN’S global data center pipeline. The partnership will also focus on expanding access to Nvidia-powered AI computing for startups, AI native, and enterprise customers through DSX AI factories. IREN also offered Nvidia an option to purchase up to 30 million IREN shares over the next five years at a price of $70 per share. If Nvidia chooses to exercise this right, it would invest up to $2.1 billion, subject to certain conditions, including regulatory.
IREN Ltd operates in the data center business. The company owns and runs computing hardware, power systems, and data centers. It also mines Bitcoin by operating a peer-to-peer network of computers running Bitcoin software. The company was incorporated in 2018 and is based in Sydney, Australia.
2. Constellation Energy Corporation (NASDAQ:CEG)
Potential Upside: 54.2%
Constellation Energy Corporation (NASDAQ:CEG) is one of the energy companies solving the power bottleneck that AI infrastructure currently faces. The company’s stock has underperformed the broader market over the last year, but recent analyst sentiment and news suggest things might take a turn for the better soon. At the beginning of this month, Wells Fargo reaffirmed its price target on the stock to $516, which is also the highest price target on Wall Street.
In addition, US energy regulators advanced plans to restart the Three Mile Island nuclear power plant, allowing the company to transfer certain grid rights from its Eddystone plant to the Three Mile Island facility, which is intended to serve Microsoft’s data center energy needs. The regulatory progress on this front, as this is a 20-year agreement, should provide stable cash flow in the future. The company also has a similar 20-year power purchase agreement with Meta Platforms. Till the end of 2029, management expects the company to generate more than $20 billion in free cash flow, and lower regulatory hurdles will go a long way in helping it achieve that.
Constellation Energy Corporation operates as a producer and seller of energy products and services across the United States. It operates in the New York, Mid-Atlantic, ERCOT, Midwest, and Other Power Regions segments. The company provides energy-related products, electricity, natural gas, and sustainable solutions.
1. Applied Digital Corp (NASDAQ:APLD)
Potential Upside: 66.4%
On May 27, B. Riley raised the firm’s target price on Applied Digital Corp (NASDAQ:APLD) from $53 to $66 and maintained a Buy rating on the stock. The price target implies 59% upside from current levels. This upside is consistent with the median Wall Street analysts’ upside of 66.4% as per 13 analysts covering the stock.
The firm portrayed its positive sentiment on digital infrastructure companies as it believes cloud companies are signing deals faster than ever before. Investors have placed greater value on companies that have secure access to power and can deliver projects on time. This is because local communities’ opposition, grid interconnection delays, and electrical equipment shortages were becoming problems for new developments. Applied Digital Corp has managed to deal with these issues relatively well, the analyst told investors in a research note.
In another positive news on June 8, the company announced it signed a new long-term lease at its Delta Forge 2 site. The agreement is with a US-based high-investment-grade hyperscaler. This is the company’s fifth AI data center campus overall.
Applied Digital Corp builds and operates digital infrastructure for AI and computing companies in North America. The company provides data centres and GPU computing solutions for businesses working in AI. It is headquartered in Dallas, Texas, and was founded in 2021 by Wes Cummins and Jason Zhang.
