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

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 (NASDAQ: NBIS), 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.

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.

Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla and is short shares of Apple. The Motley Fool has a disclosure policy.