While everyone debates whether Big Tech is spending too much on AI, a quieter story is unfolding in the companies actually building the infrastructure. Bank of America just slapped buy ratings on two “neocloud” stocks — CoreWeave and Nebius — and the upside targets suggest Wall Street thinks this space is massively underappreciated.
BofA analyst Tal Liani set a $100 price target on CoreWeave (CRWV), implying 22% upside from current levels, and a $150 target on Nebius (NBIS), implying 31% upside. These aren’t speculative moonshots — they’re the companies renting GPU compute power to enterprises that can’t build their own AI data centers fast enough.
CoreWeave is the more established play. With a $41 billion market cap, deep ties to NVIDIA (which holds an equity stake), and a $50 billion-plus revenue backlog, it’s the institutional favorite. The bull case is simple: NVIDIA gives CoreWeave priority access to next-gen Blackwell chips, and its U.S.-based data center network makes it the go-to for sensitive domestic AI workloads. The bear case? A debt-heavy balance sheet from aggressive expansion and an 18x sales multiple that’s rich even by tech standards.
Nebius is the wild card — and arguably the more explosive opportunity. Formerly Yandex N.V., the company rebranded and has been on a tear, landing a jaw-dropping $19 billion deal with Microsoft and a $3 billion contract with Meta. Analysts forecast revenue growth of 355% to 600% in 2026. At a $23 billion market cap, Wedbush has even flagged it as a prime acquisition target for Big Tech looking to buy rather than build AI capacity.
The broader theme here is critical: demand for AI compute is outstripping supply by a wide margin. While the Magnificent Seven grab headlines with their trillion-dollar capex plans, the neoclouds are the picks-and-shovels play on the AI gold rush. They don’t need to win the AI model race — they just need to keep the lights on for everyone else who’s trying to.
One year post-IPO, CoreWeave and Nebius have taken very different paths — CoreWeave is up modestly while Nebius has surged over 230%. But both are positioned at the center of an infrastructure buildout that’s still in its early innings. If you believe AI spending is a multi-year cycle and not a one-quarter fad, these two names deserve a spot on your watchlist.
