Prediction: This Neocloud Stock Will Outperform the "Magnificent Seven" in 2026

By Adam Spatacco – Mar 19, 2026 at 7:15PM ESTKey PointsArtificial intelligence (AI) hyperscalers are forecast to spend nearly $700 billion on infrastructure this year. While much of this budget will be allocated toward GPUs, neocloud services have been in high demand as well.Neocloud stocks have handily outperformed the "Magnificent Seven" over the last year.For the better part of three years now, mega-cap technology stocks have been the biggest beneficiaries of the artificial intelligence (AI) revolution. Collectively known as the "Magnificent Seven," Nvidia, Microsoft, Apple, Alphabet, Amazon, Tesla, and Meta Platforms have produced market-beating gains. However, a new pocket of the AI realm is emerging -- outshining its big tech counterparts. Enter neocloud stocks: CoreWeave, Iren, and Nebius Group (NBIS +2.56%), each of which has generated triple-digit gains over the last year. IREN data by YCharts Let's discuss how neoclouds are evolving into a critical pillar supporting ongoing AI infrastructure investments, and why I'm particularly bullish on Nebius stock for 2026. Nebius had a monster 2025 One of the main themes defining the AI revolution so far has been big tech's commitment to infrastructure. But what does that really mean? In essence, AI hyperscalers are spending hundreds of billions of dollars to procure clusters of graphics processing units (GPUs) from Nvidia and Advanced Micro Devices. From there, these chipsets are installed in server racks in data centers. These architectures are the underlying nuts and bolts on which generative AI applications are built. Here's the problem: Even with their massive budgets, AI developers often lack easy access to GPU infrastructure. This is where neoclouds come into play. Through strategic alliances with Nvidia, Nebius can procure the industry's latest and greatest GPU architectures. Subsequently, the company effectively rents out capacity to these chip clusters through a cloud-based infrastructure. In essence, Nebius helps democratize access to GPUs for businesses that may not have the time or budget to build their own AI data center. To help understand just how critical neoclouds have become, consider the following: In September, Microsoft signed a five-year deal worth up to $19.4 billion with Nebius. Microsoft will access GPU infrastructure capacity from a Nebius data center in New Jersey. In December, Nebius signed another capacity deal as Meta agreed to a five-year contract valued at $3 billion. Image source: Getty Images. 2026 has gotten off to an incredible start Over the last several weeks, big tech reported financial results for the fourth quarter and full year 2025. Among the major hyperscalers -- Microsoft, Alphabet, Amazon, Meta, and Tesla -- an estimated $690 billion will be spent on capital expenditures (capex) this year. In a shock to absolutely no one, the majority of this spend will be allocated toward AI infrastructure. GOOGL Capital Expenditures (TTM) data by YCharts On the surface, these tailwinds look great for chip stocks. But remember what I said above about companies that may not be able to procure GPUs and AI accelerators? Where might their budgets be allocated? If you guessed neocloud services, you'd be right. Just this week, Nebius announced a game-changing expansion with Meta. Nebius will provide Meta with dedicated capacity across multiple locations featuring access to Nvidia's upcoming Vera Rubin chips. In addition, Meta also agreed to purchase additional compute capacity across other Nebius GPU clusters in the coming years. In total, the new deal with Meta is worth up to $27 billion. Should you buy Nebius stock in 2026? Nebius stock has already skyrocketed 57% in 2026. With momentum of this magnitude, the bigger question is whether Nebius' stock is priced to perfection. ExpandNASDAQ: NBISNebius GroupToday's Change(2.56%) $3.04Current Price$121.60Key Data PointsMarket Cap$30BDay's Range$114.80 - $121.7552wk Range$18.31 - $141.10Volume516KAvg Vol14MGross Margin-765.63% For those looking to outperform big tech this year, I would suggest focusing on companies positioned to benefit from rising AI infrastructure investment, rather than those spending and developing new product lines. Given Nebius's established presence as a mission-critical AI services provider, I see the company positioned for explosive growth in 2026 and beyond. On the one hand, the company has already proven an ability to acquire and expand relationships with landmark customers. On a deeper level, however, given big tech's collective mindset of doubling down and accelerating AI infrastructure investment, Nebius is in a unique position to continue capturing incremental budget spend driven by these secular tailwinds -- all while maintaining multi-year revenue visibility. To me, the best way to invest in a hot growth stock such as Nebius is to use dollar-cost averaging -- buying shares at various price points over time. In my eyes, Nebius stock remains a good buy.Read NextMar 19, 2026 •By Bram BerkowitzMeta Platforms Just Delivered Incredible News to This AI Data Center CompanyMar 18, 2026 •By David Jagielski, CPANebius Stock Just Reminded Investors About Its Biggest RiskMar 18, 2026 •By Adria CiminoIs Nebius Stock a Buy Now?Mar 17, 2026 •By Joe TenebrusoWhy Nebius Stock Fell TodayMar 17, 2026 •By Howard SmithStock Market Today, March 17: Nebius Group Falls After Announcing $3.75 Billion Capital RaiseMar 17, 2026 •By Parkev Tatevosian, CFAHuge News for Nebius Stock and Meta Stock Investors!About the AuthorAdam Spatacco is a contributing Motley Fool technology analyst covering artificial intelligence, robotics, autonomous driving, e-commerce, and cybersecurity stocks. Previously, Adam was an investment banking analyst specializing in mergers and acquisitions, as well as debt and equity capital raises, for software companies. He later worked in corporate development at venture-backed technology start-ups. He holds a bachelor’s degree in business administration with a concentration in finance from the University of Richmond.TMFmoneyballX@moneyballinvestStocks MentionedNebius GroupNASDAQ: NBIS$121.60(+2.56%)+$3.04Meta PlatformsNASDAQ: META$606.67(-1.46%)-$9.01MicrosoftNASDAQ: MSFT$389.28(-0.64%)-$2.51AlphabetNASDAQ: GOOGL$307.22(-0.15%)-$0.47AppleNASDAQ: AAPL$249.14(-0.32%)-$0.80TeslaNASDAQ: TSLA$380.25(-3.19%)-$12.53AmazonNASDAQ: AMZN$208.88(-0.47%)-$0.99NvidiaNASDAQ: NVDA$178.83(-0.87%)-$1.57Advanced Micro DevicesNASDAQ: AMD$205.27(+2.91%)+$5.81AlphabetNASDAQ: GOOG$305.93(-0.12%)-$0.37IrenNASDAQ: IREN$41.70(-1.22%)-$0.52CoreWeaveNASDAQ: CRWV$80.77(-2.48%)-$2.05*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.