Key Points
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Iren stock has been beaten down despite the company’s 5.8-gigawatt pipeline and access to capital.
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Nebius is recognizing more backlog revenue from its existing contracts and commanding $40 million to $50 million per megawatt for short-term compute deals.
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CoreWeave has to navigate a series of looming debt maturities, but its $104.2 billion backlog shows that patience may pay off.
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The past month was a bloodbath for neocloud stocks, no matter where you look. CoreWeave (NASDAQ: CRWV), Nebius (NASDAQ: NBIS), and Iren (NASDAQ: IREN) are three of the most popular names in the space, and it was ugly for all of them.
Nebius was the top performer out of those three tech stocks, relatively speaking, with a 42% loss over the past month. Neocloud companies that use the colocation model didn’t do much better. TeraWulf is down by roughly 30%, while Cipher Digital has plunged by almost 60%.
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It might not look like it now, but a neocloud rally may start to take shape soon. Here are three stocks that stand to benefit.
Iren
Among CoreWeave, Nebius, and Iren, it was Iren that took the hardest hit in October. While each neocloud is well positioned for a rally, Iren is the poster child of how quickly fortunes in this niche of the tech sector can change. It’s trading at around a third of its all-time high, but it was just last year that Iren marched from $5 per share in April 2025 to almost $77 per share in November 2025.
That’s the type of march neocloud stocks can enjoy once sentiment changes, especially if macroeconomic conditions improve. For now, Iren is flirting with a $20 price tag ahead of its fiscal 2027 Q1 report, due out on Nov. 5.
Its annual recurring revenue growth highlights how it can experience a parabolic move, like it did in mid-2025. Iren has a 5.8-gigawatt pipeline and is set to bring 500 megawatts online in 2027, which would boost its total to 800 megawatts delivered. At $20 million per megawatt, those 800 megawatts can produce $16 billion in annual recurring revenue.
Late-stage discussions for 2027 capacity and discussions progressing for 2028 capacity suggest that demand remains strong, despite the stock’s steep decline.
Nebius
Nebius hasn’t been beaten up as much as Iren — in fact, it’s still up year to date. However, the stock is still well below its all-time high despite showing material revenue growth tied to AI.
In Q2, its revenue surged by 454% year over year as more long-term deals got delivered. It’s still unprofitable, but total operating expenses only rose by 251% year over year, so revenue growth was outpacing its growth in total costs. That type of setup eventually translates into profitability.
Nebius’ compute is also commanding high prices per megawatt; it mentioned $40 million to $50 million per megawatt for short-term deals in its Q2 shareholder letter. Total contract values quadrupled sequentially, and its recent introduction of live spot prices for GPU compute implies that demand is still surging.
Prepayments are financing 50% to 60% of its capital expenditures, and Nebius is still able to tap into financial markets for the remainder of its needs. It secured a $3.5 billion financing facility from Citi in October, showing that access to loans has not entirely dried up for neoclouds.
CoreWeave
CoreWeave is my least favorite of these three stocks due to its debt. It has an undesirable 0.46 current ratio, which means it has more current liabilities than current cash. It will have to refinance and postpone the retirement of some of that debt, and given the current macroeconomic conditions, that will result in the company paying higher interest rates on it.
Furthermore, the company does not own all of the land upon which it is building. Some of its business relies on leasing property from colocation providers like Applied Digital (NASDAQ: APLD) and Core Scientific (NASDAQ: CORZ).
CoreWeave may not have full ownership of the land or the power supplies its data centers require, but this business model helps it scale its AI cloud services with less initial overhead. AI processors are still incredibly expensive, which explains why CoreWeave is still sitting on a lot of debt that is coming due soon.
In the second quarter, CoreWeave’s revenue more than doubled year over year to $2.6 billion. It also almost achieved a positive operating margin. It has 1.5 gigawatts of active power along with approximately 4.2 gigawatts of contracted power, most of which isn’t online yet.
Notably, CoreWeave is sitting on a $104.2 billion backlog, and its backlog has more than tripled year over year. This signals how rapidly AI is growing and what type of revenue potential awaits neoclouds after they are able to execute on more of their contracts. However, all of that potential revenue will take several years to be fully realized. If CoreWeave can refinance its debt on reasonable terms, the bullish thesis for its stock gets a lot louder.
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Citigroup is an advertising partner of Motley Fool Money. Marc Guberti has positions in Iren and has the following options: long May 2027 $20 calls on Iren and long May 2027 $28 calls on Iren. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
