"The rise of the neocloud has really excited risk-taking AI investors who are comfortable with excess levels of volatility for a shot at bigger returns. With the rise of CoreWeave ( NASDAQ:CRWV) and Nebius Group ( NASDAQ:NBIS) really capturing the love of traders because of their strong growth rates and even more promising long-term narratives, the average investor is most likely wondering if it's worth exposing one's portfolio to such an emerging and booming corner of the AI trade."
"Lots of growth in the neocloud, but you're paying up for the exposure While I'm no advocate for just buying a stock based on its growth story and leaving the valuation as an afterthought, I do find the recent action in the so-called neocloud plays as nothing short of exciting. And in this piece, we'll look closely at the two names to see if either is worth watching or even buying (small amounts) going into November."
Neocloud companies have attracted risk-taking AI investors willing to accept high volatility for potential outsized returns. CoreWeave and Nebius Group gained trader enthusiasm due to strong growth rates and persuasive long-term narratives. Valuations for these names are elevated and reflect significant investor optimism, supported by momentum, booming AI demand, and multi-year growth potential. Short-term outcomes remain uncertain, with shares capable of sharp gains or losses. Building positions gradually is recommended for longer-term AI exposure, particularly during a volatile tech earnings season driven by elevated expectations for results and guidance.
Read at 24/7 Wall St.
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