AI ETFs to Buy Now as Neocloud Reshapes Cloud Infrastructure
The artificial intelligence (AI) infrastructure buildout is entering a new phase, with Neocloud providers rapidly emerging to capture a massive share of the total AI spending. Impressively, Neocloud providers — specialized companies built specifically for GPU-intensive AI workloads — are expected to capture 20% of the $267 billion AI cloud market by 2030, according to Gartner.
With enterprises prioritizing data sovereignty, performance, and cost efficiency, Neoclouds are becoming a permanent fixture in the cloud computing infrastructure landscape.
For investors seeking targeted exposure to this structural change without picking individual winners, AI-focused exchange-traded funds (ETFs) offer a more direct path than traditional cloud computing funds, many of which lack meaningful exposure to the pure-play neocloud operators driving this growth.
Before delving into these ETFs, it is important to understand the factors driving Neocloud’s recent rise, its key growth enablers and the rationale behind using ETFs to gain exposure to the space.
What's Driving the Rise of Neocloud Tech?
The neocloud phenomenon stems from a fundamental mismatch between traditional cloud architecture and AI workloads. Hyperscalers like AWS, Microsoft and Google built their empires on general-purpose computing, but training and running large language models require massive clusters of Nvidia GPUs operating with specialized networking and storage.
Neoclouds were founded precisely to fill this gap, offering superior performance on AI workloads, flexible deployment models, and often more competitive pricing than legacy providers.
Several prominent companies are leading this charge. CoreWeave CRWV, originally an Ethereum mining operation, now operates 51 data centers across North America and Europe with more than a quarter-million Nvidia GPUs deployed. Its platform processes AI tasks roughly 35 times faster and 80% more cheaply than AWS or Azure, and its customer list includes Meta, Microsoft, OpenAI, and Anthropic.
In the second quarter, this company generated $2.6 billion in revenues, registering 112% growth year over year, driven largely by its specialized AI and neocloud GPU infrastructure services.
Nebius Group NBIS represents another Neocloud pure-play, which focuses on AI-optimized infrastructure and has partnered with Microsoft to deliver AI capacity. The company achieved 454% revenue growth in its latest reported quarter, driven primarily by its core AI cloud-computing business.
The Case for ETF Investment
Looking ahead, as AI applications are rapidly transitioning from basic model training to long-term production AI deployments and enterprise inference workloads, the Neocloud providers are expected to experience unprecedented momentum. To this end, leading research firms, like Synergy Research Group, project the global neocloud market to expand rapidly from its $25 billion base in 2025 to nearly $400 billion by 2031.
Against this backdrop, investment in Neocloud should help investors enjoy profitable returns in the days ahead. However, individual neocloud stocks are volatile, capital-intensive businesses, where missteps in GPU procurement or excessive customer concentration can affect shareholder returns.
For instance, CoreWeave, despite its explosive revenue trajectory, continues to report GAAP losses and carries a long-term debt-to-equity ratio exceeding 500%.
On the contrary, traditional cloud computing ETFs are dominated by software companies like Snowflake, Datadog, and Salesforce, with very little Neocloud representation.
However, AI ETFs explicitly target the hardware and compute layer of the AI stack, providing meaningful allocations to CoreWeave, Nebius, and other neocloud enablers, thereby mitigating single-stock concentration risk while preserving exposure to the Neocloud theme.
AI ETFs to Buy
Considering the aforementioned discussion, investors seeking to capitalize on the Neocloud rally while avoiding single-stock volatility may consider adding the following ETFs to their portfolios:
iShares Future AI & Tech ETF ARTY
This fund, with net assets worth $4.25 billion, offers exposure to 50 companies contributing to AI technologies across software, infrastructure and services. Advanced Micro Devices AMD holds the first spot in this fund, with 5.63% weightage, while CRWV holds the seventh position with 4.16% weightage.
ARTY has surged 63.2% year to date and charges 47 basis points (bps) in fees. It traded at a volume of 0.57 million shares in the last trading session.
ROBO Global Artificial Intelligence ETF THNQ
This fund, with net assets worth $481.4 million, offers exposure to 55 companies developing the technology and infrastructure enabling AI, such as computing, data and cloud-services, as well as companies that apply AI in various verticals, from business processes to e-commerce and healthcare, among others. Global Unichip Corp holds the first spot in this fund, with 2.52% weightage, while NBIS holds the 12th position with 2.06% weightage.
THNQ has soared 52.1% year to date and charges 68 bps in fees. It traded at a volume of 0.15 million shares in the last trading session.
Roundhill Neocloud ETF NCLD
This fund, with assets under management (AUM) worth $99.1 million, offers exposure to 22 Neocloud companies. NBIS holds the first spot in this fund, with 31.76% weightage, while CRWV holds the second position with 25.37% weightage.
NCLD has rallied 9.6% year to date and charges 65 bps in fees. It traded at a volume of 0.34 million shares in the last trading session.
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This article originally published on Zacks Investment Research (zacks.com).
