Following a previous cycle of sharp gains and subsequent declines, trading focused on "AI Cloud" infrastructure, data centers, and high-performance computing is making a comeback, with capital flowing back towards more pure-play suppliers of computing power. Since the start of 2026, CoreWeave, Inc. has accumulated gains of over 40%, Nebius has risen nearly 30%, while Iren, which covers both high-performance data centers and Bitcoin mining, has surged more than 53%.
The key drivers behind this rebound are concentrated on two points: improved profit expectations and an "upward breakout" in price trends. More importantly, strong signals from the chip sector are providing external validation for the "AI Cloud" narrative. According to Zacks Research, Taiwan Semiconductor Manufacturing's better-than-expected quarterly performance and its upward revision of 2026 capital expenditures have reinforced the judgment that AI demand continues to expand. This has alleviated the most sensitive risk points for the AI cloud service model on both the supply and demand sides, prompting a return of market risk appetite to the more specialized AI compute cloud sector.
Capital is returning to the supply side of computing power. By the end of 2025, Iren, Nebius, and CoreWeave, Inc. were among the most aggressive winners during the AI infrastructure boom, posting triple-digit gains within months. As risk appetite cooled and capital withdrew from speculative sectors, these stocks experienced steep corrections. However, according to Zacks Investment Research, this trend has recently begun to shift. Stock prices have stabilized and turned upward, while profit expectations and forward-looking outlooks have started to improve. Iren is defined as a vertically integrated digital infrastructure company, with businesses covering high-performance data centers and Bitcoin mining, supported by renewable energy generation. Its scalable infrastructure directly benefits from the rising demand for computing power and electricity driven by AI and data-intensive workloads. Zacks Research points out that Iren's sales are projected to grow by approximately 120% this year, followed by a further increase of about 151% next year. Technically, the stock price formed a W-bottom pattern before breaking upward, which is seen as a typical characteristic of the early stages of an uptrend.
Nebius, positioned as an AI-oriented infrastructure and cloud service provider, is supported by upward revisions to its profit expectations. Looking ahead, the market anticipates its sales will grow by 376% next year. Meanwhile, CoreWeave, Inc., a trigger for last year's "AI meltdown," has completed the initial chip delivery for OpenAI at its Texas data center. It was noted that, according to CoreWeave executives, the company rapidly scaled from "a few racks delivered in mid-November" last year to over 16,000 GPUs by the end of December. This progress signals that CoreWeave, Inc. is recovering from the revenue impact suffered in the fourth quarter of last year due to delays from data center suppliers.
Taiwan Semiconductor Manufacturing's earnings report provides fundamental support. For new cloud service providers like CoreWeave, Inc. and Nebius, Taiwan Semiconductor Manufacturing's performance validates their business models. Since the entire value proposition of AI cloud service providers relies on access to cutting-edge AI chips, Taiwan Semiconductor Manufacturing's explosive quarterly results and forward guidance alleviate two major risks. On the supply side, Taiwan Semiconductor Manufacturing's record manufacturing yields and capacity expansion mean that CoreWeave, Inc. and Nebius can fulfill their multi-billion-dollar order backlogs. Regarding demand strength, when the world's largest chipmaker raises its 2026 capital expenditure to between $52 billion and $56 billion, it indicates that tech companies are still placing large-scale, long-term orders for AI chips. Taiwan Semiconductor Manufacturing's gross margin reaching 62.3% proves that the industry is not only growing but also highly profitable, essentially quelling concerns about an "AI bubble." Zacks Investment Research notes that volatility remains the norm in this niche "AI Cloud" sector. However, judging from price action and changes in expectations, market risk appetite is returning to more narrowly focused, crowded trades like AI infrastructure and "AI Cloud," and the signs of capital rotation are worth monitoring closely.
Comments