As earnings season comes into focus, growth investors are paying close attention to artificial intelligence (AI) stocks in particular. Among the most scrutinized names are the hyperscalers: Microsoft, Alphabet, Meta Platforms, and Amazon (AMZN 1.23%).
On Feb. 5, Amazon will report earnings for the fourth quarter and full year 2025. While investors anxiously await updates regarding the company's performance during the holiday season and where management's forward guidance falls, I'll be on the lookout for something else entirely.
Listen closely during Amazon's earnings call
My hunch is that Wall Street is going to dial in on one specific number during Amazon's earnings call: capital expenditures (capex). Over the last three years, big tech has collectively spent hundreds of billions of dollars buying GPUs and building data centers. If current spending trends tell us anything, it's that the hyperscalers are doubling down on AI infrastructure.
When Amazon CEO Andy Jassy talks to analysts during the earnings call, I'm going to be listening for one particular word: capacity. As the largest cloud computing platform in the world, Amazon Web Services (AWS) plays a monumental role in servicing AI workloads.
However, the pace at which workloads are expanding relative to the time it takes to build and equip an AI data center are at odds with one another. Moreover, procuring sufficient volumes of chips to service capacity needs adds another variable to the infrastructure equation.
To complement its data center build-outs, AWS signed a $5.5 billion multiyear deal with neocloud Cipher Mining back in November.
Image source: Getty Images.
Why Iren stock might go parabolic in 2026
Neoclouds partner with chip designers and outfit data centers with clusters of GPUs. From there, companies that are capacity-constrained rent access to these GPUs through the cloud.
In addition to Cipher, other leading neoclouds include CoreWeave and Iren (IREN 1.81%). Just days ago, Nvidia invested $2 billion into CoreWeave. This deal was strategic in nature as it validates the GPU-as-a-service business model, as well as underscores Nvidia's commitment to CoreWeave as an existing backer.
Nvidia and AWS are not the only ones taking advantage of neoclouds, either. Around the same time as Cipher's partnership formed with AWS, Microsoft announced a $9.7 billion agreement with Iren.
NASDAQ: IREN
Key Data Points
Given AWS is already leveraging neoclouds as part of its infrastructure playbook, in combination with the timing of Nvidia's recent deal with CoreWeave, I think Iren could be in position to win over another hyperscaler sooner rather than later.
In the grand scheme of things, whether or not a deal is announced on the earnings call is moot. The broader takeaway here is that complementing your core AI positions with neoclouds could prove wise in the long run. For this reason, I see Iren as a top neocloud stock to own and would not worry about timing my buys around a particular earnings announcement.
