If you’ve been following the AI boom, you may know that the big hyperscalers (AWS, Azure, Google Cloud) can’t keep up. That’s exactly where the Neocloud comes into play. Nebius Group NV (NBIS) is the standout, writes Danielle Shay, editor of Five Star Trader.
Demand for raw GPU compute and the infrastructure required to run high-level AI models is expanding exponentially as more companies and individuals adopt AI. Multiple large companies have already come out this year and stated that they are using advanced generative AI rather than hiring more workers. In some cases, they are also cutting thousands of workers.
This is only the beginning of larger AI adoption. Usage will continue to explode across a variety of use cases, from complex agentic AI large language models capable of high-level reasoning and coding to robots like Optimus and autonomous cars already available in cities like Austin and Las Vegas.
Nebius Group NV (NBIS)
Data by YCharts
Neoclouds are companies that build and run data centers packed with thousands of the world’s most powerful AI chips – mostly Nvidia Corp. (NVDA) GPUs. Their only business is renting time on those chips to AI companies so they can train and run massive models. They don’t offer websites, storage, or email like the old clouds did.
Nebius was spun out of Yandex with elite engineers and $2.5 billion in cash. It’s already sold out for Q1 and has a $17 billion-plus Microsoft Corp. (MSFT) deal locked. It’s Wall Street’s favorite “CoreWeave 2.0 with a tech edge.”
I will continue trading names like NBIS on a short-term basis, especially when they break out above previous highs and short squeeze. I’ll hold them on a long-term basis unless they break critical support and something fundamental changes. For example, I use the 50 SMA on the weekly chart as a key technical stop-loss zone.
