These 2 Neocloud stocks could dominate AI compute, says BofA

The artificial intelligence space has been making all the noise on Wall Street for the past two years.

With soaring valuations, the chip giants like Nvidia or other hyperscalers such as Microsoft, Amazon, and Alphabet seem to be dominating the sector.

Now, Bank of America is making a more specific bet that a newer class of cloud providers built around AI workloads could emerge as a major market segment of its own.

The firm has turned bullish on Nebius and CoreWeave, arguing that both are well placed to benefit from the scramble for GPU-heavy compute.

Why Neoclouds are suddenly in focus

The basic idea is simple. Neoclouds are not trying to be all-purpose cloud giants in the mold of Amazon Web Services or Microsoft Azure.

Instead, they are building AI-specific infrastructure.

It includes GPU-dense data centers, software tuned for model training and inference, and capacity that can be deployed quickly.

That distinction matters because when AI demand is straining not only chip supply, but a host of other factors like power, land, and the pace at which data centers can be built.

In other words, the AI buildout is no longer just about who makes the chips; it's about who can deliver the underlying plumbing in the most efficient way.

Why BofA is betting on Nebius and CoreWeave

Nebius is the more striking momentum story.

The company reported fourth-quarter 2025 revenue of $227.7 million, even as it remained loss-making during a heavy buildout phase.

This month, Nvidia said it would invest $2 billion in Nebius for an 8.3% stake.

Nebius also won approval in Independence, Missouri, to move ahead with its first gigawatt-scale AI factory, with potential capacity of up to 1.2 gigawatts.

Moreover, Meta agreed to buy $12 billion of AI computing capacity from Nebius by 2027.

The deal includes an additional $15 billion of planned capacity potentially available over five years, bringing the total value to as much as $27 billion.

That followed Nebius’s previously disclosed $17.4 billion, five-year infrastructure deal with Microsoft from September 2025.

The massive contracts help explain why Wall Street is paying attention.

When it comes to CoreWeave, it is a more established US neocloud name with a larger scale.

The company reported fourth-quarter 2025 revenue of $1.572 billion, up 110% from a year earlier.

BofA's positive view rests on the broad theme: strong AI compute demand, software optimized for AI workloads, and close strategic ties to giants like Nvidia and OpenAI.

The bull case is real, but so are the risks

Both companies are trying to grow into a huge market, but they are doing so with enormous capital needs.

CoreWeave expects 2026 capital expenditures of $30 billion to $35 billion, up sharply from $14.9 billion in 2025.

The capex plan came as the company is planning to buy more Nvidia chips, builds new data centers, and secure power.

Nebius faces a similar balancing act as the company closed a $4.34 billion convertible debt raise and plans to fund roughly 60% of its growth spending through customer prepayments.

The investors must understand that BofA's bullish call is not simply a fresh vote of confidence; it is that Neoclouds are beginning to look like a distinct way to play the AI buildout beyond chips.