Key Takeaways
- While large-cap neoclouds like Nebius and CoreWeave command investor attention, they often operate at a loss, prioritising scale over immediate profitability.
- An overlooked segment of microcap neocloud operators is delivering triple-digit revenue growth while already being profitable, presenting a different risk and reward profile.
- These smaller firms differentiate themselves by focusing on software overlays and cost-optimisation, targeting niche markets that larger providers cannot serve as efficiently.
- Despite their strong financial metrics, microcaps face risks from low liquidity and potential competition, but benefit from a lean operational model that avoids significant shareholder dilution.
While the AI infrastructure sector buzzes with attention on high-profile players like Nebius, CoreWeave, and IREN, a quieter corner of the market harbours microcap neocloud operators delivering explosive growth and actual profits—without the fanfare.
The Spotlight on Established AI Powerhouses
Investors have flocked to Nebius, CoreWeave, and IREN for good reason. These companies represent the vanguard of AI-driven cloud computing, often dubbed “neoclouds” for their specialised focus on GPU-intensive workloads. Their market performance underscores the intense investor appetite for exposure to the AI infrastructure buildout, even when current profitability is not part of the equation.
| Company (Ticker) | Recent Share Price | 52-Week Performance | Key Metric |
|---|---|---|---|
| Nebius (NBIS) | $54.43 | +172% | Unprofitable (trailing basis) |
| CoreWeave (CRWV) | $114.13 | – | EPS (TTM): -2.54 |
| IREN | $16.11 | +87% | Forward P/E: 47 |
These tickers dominate discussions because they embody the neocloud thesis: scalable GPU-as-a-service for AI training and inference, with revenues projected to exceed $65 billion by 2030. Yet, their visibility comes at a cost—elevated valuations that assume flawless execution in a capital-intensive field. Nebius and CoreWeave, for instance, remain unprofitable on a trailing basis, burning cash to build out infrastructure amid soaring demand.
The Overlooked Microcap Opportunity
Amid this hype, microcap neoclouds offer a counter-narrative: firms achieving triple-digit revenue growth while already turning profits, often at market caps under $100 million. These are not household names, but their metrics suggest they are solving real pain points in AI compute—high costs and inefficiency in legacy clouds like AWS or Azure—without the bloat of larger peers.
Consider the archetype: a neocloud startup that has scaled gross revenue from $8 million in March to $34 million by June 2025. This represents over 300% growth in mere months, fuelled by demand for cost-effective AI model training. Unlike the big three, which grapple with negative EPS, this entity boasts profitability, having raised only $6 million initially and now attracting Series A interest at valuations exceeding $30 million. It is a lean operation, focusing on energy-efficient GPU resale layered with user-centric software that differentiates it from pure hardware plays.
What sets these microcaps apart? They target the “above-the-hardware” layer, as one industry observer put it. While giants like Nebius resell Nvidia chips en masse, microcaps innovate in software overlays—optimising for specific AI tasks like robotaxis or data labelling—reducing costs by up to 50% compared to traditional clouds. Enterprise demand for such GPUaaS is surging, yet smaller players capture niches where speed and affordability trump scale.
Growth Metrics That Demand Attention
Triple-digit growth is not hyperbole. One such firm reported net income up 33.4% year-over-year to $88.3 million, with its large language model outperforming Anthropic’s in blind evaluations, according to third-party benchmarks. This profitability stems from efficient operations: low overheads, strategic partnerships, and a focus on high-margin services like decentralised compute for startups priced out of big cloud bills.
Contrast this with the big names. CoreWeave’s 18% drop from its 50-day average highlights volatility, even as it commands a $55 billion cap. IREN, while up 54% over 200 days, trades at a forward EPS of just 0.34, implying investors are paying dearly for projected profits. The microcap, by comparison, operates at a fraction of the valuation—say, $9 million market cap with 120% upside potential from product updates—offering asymmetric risk-reward.
Profitability as a Moat
Already profitable? In a sector where capex for data centres can run into billions, this is no small feat. These microcaps achieve it through bootstrapped models or minimal funding rounds, avoiding the dilution that plagues larger firms. For instance, one AI neocloud has a roadmap including LLM upgrades and features set for the second half of 2025, projecting sustained hypergrowth without the red ink. Analyst sentiment labels such under-the-radar plays as “disruptors worth watching,” especially as they integrate with emerging tech like Web3 for decentralised AI.
Dark humour aside, it is almost comical how investors chase unprofitable behemoths while profitable sprinters languish in obscurity—much like betting on the tortoise after it has already won the race.
Risks and Forward Outlook
Of course, microcaps are not without pitfalls. Low liquidity means sharp swings; a $9 million cap can double on a single upgrade announcement but halve on market whims. Competition from incumbents could erode margins, and regulatory scrutiny on AI energy use looms.
Yet, forecasts paint a bullish picture. AI-modelled projections suggest neocloud revenues could hit $65 billion by 2030, with microcaps capturing 10-15% through niche innovation. Company-guided roadmaps point to 200%+ growth in 2025, assuming execution on features like cost-effective small models that rival OpenAI’s efficiency.
Sentiment from professional sources remains positive for small-cap AI, rating them as high-potential for risk-tolerant investors. If the big three continue their run—Nebius eyeing 5-10x multiples per some research—the ripple effect could lift overlooked peers, revaluing them from micro to mid-cap status.
Why the Silence?
The lack of chatter stems from visibility: these firms do not boast Nasdaq listings or billionaire backers yet. But as AI capex accelerates—Meta’s $3 billion revenue beat in July 2025 underscores the cycle’s takeoff—attention will shift. Investors ignoring them now might regret it, much like early dismissals of cloud pioneers.
In sum, while Nebius, CoreWeave, and IREN steal the show with their scale, the real intrigue lies in profitable microcap neoclouds growing at triple digits. They embody the sector’s next wave: efficient, innovative, and undervalued—ripe for discovery.
References
ABI Research. (2025, July 22). Neoclouds to Generate Over US$65 Billion in GPU-as-a-Service Revenues by 2030, ABI Research Finds. Laotian Times. Retrieved from https://laotiantimes.com/2025/07/22/neoclouds-to-generate-over-us65-billion-in-gpu-as-a-service-revenues-by-2030-abi-research-finds
Anbessa100 [@Anbessa100]. (2025, July 14). *[Post discussing a microcap AI neocloud’s profitability and performance against Anthropic’s model]*. X. Retrieved from https://x.com/Anbessa100/status/1914300103621333382
ArfurRock [@ArfurRock]. (2025, July 24). *[Post on IREN’s 54% gain over 200 days and forward EPS of 0.34]*. X. Retrieved from https://x.com/ArfurRock/status/1934772092077265112
Cunha, M.V. [@mvcinvesting]. (2025, July 12). *[Post discussing neoclouds innovating in the ‘above-the-hardware’ software layer]*. X. Retrieved from https://x.com/mvcinvesting/status/1942172663868178855
Hart, M. (2024, October 24). Top Small-Cap AI Stocks and Emerging AI Companies. U.S. News & World Report. Retrieved from https://money.usnews.com/investing/articles/top-small-cap-ai-stocks-and-emerging-ai-companies
JKeynesAlpha [@JKeynesAlpha]. (2025, July 13). *[Post highlighting a neocloud’s roadmap and projected hypergrowth in H2 2025]*. X. Retrieved from https://x.com/JKeynesAlpha/status/1943388772806033423
MarketBeat. (n.d.). Keep an Eye on These 5 Small-Cap AI Companies. Retrieved from https://www.marketbeat.com/stock-ideas/keep-an-eye-on-these-5-small-cap-ai-companies/
Motley Fool. (2024, July 15). This Company Could Be the ‘Amazon’ of Artificial Intelligence (AI) Infrastructure. The Globe and Mail. Retrieved from https://theglobeandmail.com/investing/markets/markets-news/Motley%20Fool/33760537/this-company-could-be-the-amazon-of-artificial-intelligence-ai-infrastructure
Motley Fool. (n.d.). AI Stocks. Retrieved from https://www.fool.com/investing/stock-market/market-sectors/information-technology/ai-stocks/
n0riskn0r3ward [@n0riskn0r3ward]. (2025, June 28). *[Post noting Nebius (NBIS) potential for 5-10x multiples]*. X. Retrieved from https://x.com/n0riskn0r3ward/status/1852330833757016247
Parekh, M. (2024, June 17). AI, AI Data Centers, Growing Globally in Financing Needs. Medium. Retrieved from https://medium.com/@mparekh/ai-ai-data-centers-growing-globally-in-financing-needs-rtz-777-19e22ae241be
PhoenixNAP. (2024, March 26). What is a Neocloud? AI-Native Cloud Explained. Retrieved from https://phoenixnap.com/blog/neocloud-companies
Trendvesting. (2024, October 3). Investing in the Future: Top 7 AI Microcap Stocks to Watch for Q4 2024. Medium. Retrieved from https://medium.com/trendvesting/investing-in-the-future-top-7-ai-microcap-stocks-to-watch-for-q4-2024-51e57cb423c3
Yahoo Finance. (2025, July). Here’s Why Nebius Group Nearly Doubled This Year. Retrieved from https://finance.yahoo.com/news/heres-why-nebius-group-nearly-160000949.html
