🔍 Neo Cloud Crash: Time to Buy?
From hype to fear. Is now the moment to step in — and which player is best positioned to win?
The Neo Cloud sector has moved from extreme hype to extreme fear in just a few weeks. After a period of very strong interest in AI infrastructure, many of these stocks have dropped sharply in the last 1–2 weeks. Many investors become uncertain during drops like this and find it hard to keep their emotions under control.
In this Insights article, we take you along. We start by explaining what Neo Clouds are, why they matter, and why they are under pressure right now. Then we zoom in on the key players, look at the differences between them, and look at which one is best positioned to benefit in the long term.
☁️ What Are Neo Clouds?
Neo Clouds are a new generation of cloud providers that focus entirely on delivering the heavy infrastructure needed for modern AI workloads. Unlike traditional hyperscalers, which offer a wide range of general cloud services, Neo Clouds specialise in raw GPU compute power, high-speed networking, and storage built specifically for training and running AI models.
Their entire offering is built around GPU-as-a-Service: giving customers direct access to high-performance GPUs at scale. Because they operate in a single niche, they can often move faster, offer clearer pricing, and deliver capacity more efficiently than large cloud platforms.
The key characteristics of Neo Clouds are:
Built for AI – designed specifically for AI and machine learning.
GPU-focused – high-performance GPUs are the core of their business.
Optimized infrastructure – fast data movement, low-latency networks, dense GPU clusters.
Cost-efficient – often cheaper and more transparent than hyperscalers.
Faster access – customers can get the needed hardware quickly, without long waiting times.
And the timing couldn’t be more important. Demand for AI compute is growing faster than traditional cloud providers can keep up with. As companies like Meta, Microsoft, Google, and OpenAI push their model sizes higher, they need more GPU capacity — and they need it quickly.
📉 Why Neo Clouds Are Under Pressure
Despite their long-term potential, Neo Clouds have come under pressure in recent weeks. Valuations climbed quickly in the past months, expectations became very high, and the broader market pullback has made investors rethink growth, margins, financing, and execution risk across the sector.
At the same time, more people are starting to wonder if we may be entering an AI bubble. Institutions like the IMF and Goldman Sachs have warned about bubble risks in parts of this market and the possibility of sharp corrections. Out of fear, many investors choose to sell first and think later, which adds even more pressure to these stocks.
🔥 Who Are the Key Players?
The Neo Cloud sector is still young, but a few companies are already defining the space. These players differ in strategy, business model, scale, and the customers they serve. Below are the 5 key companies shaping the future of AI compute infrastructure.
1️⃣ CoreWeave (CRWV)
CoreWeave is a pure-play AI infrastructure provider built around massive GPU workloads, offering some of the largest HPC clusters in the industry. The company is known for deploying datacenters at high speed and securing industry-leading GPU allocations. Its customer base consists of big tech firms, leading AI labs, and enterprises training large models. CoreWeave operates with an aggressive, capital-intensive growth model, supported by long-term compute contracts and significant borrowing.
⚡ Power Capacity: 590 MW now. 2.9 GW contracted.
🤝 Partnerships: OpenAI $22.4 billion, Meta $14.2 billion, Microsoft multi-billion
🚀 Revenue Growth (2026E): +137%
💰 Current Marketcap: $38.6 billion
📉 Drop from ATH: -58.1%
2️⃣ Nebius Group (NBIS)
Nebius is a full-stack AI cloud platform, combining high-performance GPU infrastructure with managed services like Kubernetes, PostgreSQL, object storage, and developer tools. Its platform supports both training and inference, attracting a diverse mix of startups, enterprises, and AI-native companies. Nebius operates with a debt-free balance sheet, a diversified customer base, and a rapidly scaling European footprint. Its strategy focuses on offering a complete, developer-friendly ecosystem rather than raw GPU capacity alone.
⚡ Power Capacity: 220 MW now. 2.5 GW contracted.
🤝 Partnerships: Microsoft up to $19.4 billion, Meta $3 billion
🚀 Revenue Growth (2026E): +368%
💰 Current Market cap: $21.0 billion
📉 Drop from ATH: -40.8%
3️⃣ IREN Limited (IREN)
IREN is transforming from a low-cost Bitcoin miner into a rapidly scaling AI compute provider with one of the strongest power footprints in the industry. IREN controls almost the entire stack — from power and land to datacenter buildouts — giving it some of the lowest cost structures in the industry and a credible path to becoming a full AI compute provider. Its ultra-low-cost energy base gives it structural advantages for AI training workloads, and its pivot into AI compute is reinforced by long-term capacity agreements.
⚡ Power Capacity: 810 MW now. 2.91 GW contracted.
🤝 Partnerships: Microsoft $9.7 billion
🚀 Revenue Growth (2026E): +112%
💰 Current Market cap: $13.1 billion
📉 Drop from ATH: -39.7%
4️⃣ Applied Digital (APLD)
Applied Digital was one of the first miners to shift into HPC and AI compute hosting, turning its data centers into environments built for GPU workloads. The company focuses on modular, AI-ready data center design and cost-efficient hosting. Its financing and execution are important factors to watch as Applied Digital grows its AI compute business.
⚡ Power Capacity: 286 MW now. 600 MW+ contracted with >1 GW potential
🤝 Partnerships: CoreWeave $11 billion, U.S. based hyperscaler $5 billion
🚀 Revenue Growth (2026E): +79%
💰 Current Market cap: $6.8 billion
📉 Drop from ATH: -41.2%
5️⃣ Cipher Mining (CIFR)
Cipher is shifting from traditional mining toward AI datacenter development, leveraging very low-cost power to deploy compute clusters efficiently across the US. The company is expanding its MW capacity and targeting long-term hosting demand from enterprise and cloud customers. Execution and scale remain key as Cipher moves deeper into AI workloads.
⚡ Power Capacity: 477 MW now. 468 MW contracted. 3.2 GW pipeline.
🤝 Partnerships: Amazon $5.5 billion, Fluidstack/Google $3 billion
🚀 Revenue Growth (2026E): +74%
💰 Current Market cap: $5.7 billion
📉 Drop from ATH: -43.7%
Now that we’ve covered the five key players, all down 40%–60% from their recent ATHs, the real question is:
Is now the time to buy? 🕒
Which company is best positioned for the long term? 🥇
We break it all down in the next section 👇 — exclusively for our paid subscribers ✨
🔥 Upgrade now to paid and get 30% off!
Get instant access to this article, our monthly Best Buys, our Portfolios, all Deep Dives — plus 350+ premium articles to explore! Cancel anytime ✅