Marc Guberti, The Motley Fool
4 min read
It’s always good to look for new investment ideas. While investors can look at various sectors, I like to focus on artificial intelligence (AI) stocks. This technology is still in its early stages and can fundamentally change societies. Autonomous vehicles, humanoid robots, drones, and AI chatbots are some of the products and services that can scale rapidly as AI evolves.
That’s why the two stocks I am buying in 2027 revolve around that theme. I already have positions in each of these companies and intend to build on them in 2027.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
1. Iren
Iren (NASDAQ: IREN) is my favorite neocloud stock. Nebius (NASDAQ: NBIS) is also a strong contender and slightly ahead of Iren in revenue recognition, but I do not believe Nebius should have a market cap almost four times Iren’s.
The neocloud thesis is straightforward. Hyperscalers need access to compute, and companies like Iren create the data centers that supply hyperscalers with the necessary chips, power, software, and facilities.
Iren wrapped up its fiscal 2026 fourth quarter with $1 billion in operating annual recurring revenue. The company expects to reach $4 billion in annual recurring revenue by the end of 2026. As Iren strategically waits to sign big deals, the value of compute continues to climb. The landmark five-year, $9.7 billion deal with Microsoft comes to $9.7 million per megawatt-year. Iren is now negotiating deals for $25 million per megawatt.
If Iren can eventually realize $25 million per megawatt across its entire 5.8-gigawatt portfolio, it can generate $145 billion in annual recurring revenue, assuming the per-megawatt value doesn’t continue to climb.
Some investors are worried about rising capital expenditures, but I don’t think it will be that big of a deal. Iren is getting customers to prepay 45% to 55% of each contract, which makes it easier to fund data center builds. The company can also continue GPU financing and borrow against its data centers to ensure no further dilution occurs.
2. Netlist
I like to focus on smaller AI stocks, and Netlist (OTC: NLST) certainly qualifies with a $2 billion market cap. It is developing CXL solutions that can be a major part of AI infrastructure in the future. Netlist also makes a lot of money reselling memory products, but its patent portfolio can yield immediate upside.
