What is a neocloud, and why is the market suddenly freaking out about them?
Investors are worried that funding could be scarce for neoclouds and that AI investment could slow down, hurting their business outlook. Erik Isakson/Getty Images The neocloud panic has rattled a key part of the AI trade lately. "Neocloud" encompasses cloud computing providers that primarily focus on AI services. The subsector has plunged recently amid broader funding concerns and fears AI investment may slow down. What the heck is a neocloud ? It's a question you might have asked yourself while parsing headlines about growing investor panic in the space in the last few week. Concerns have been quietly building in recent months, but only recently escalated to the level of major market risk, resulting in a rout that's spilled over into the AI and chips sectors. The Roundhill Neocloud ETF is now down around 31% since its inception this summer. The sector briefly sold off again on Monday, spooked by bearish comments from Elon Musk , before reversing course to edge highe...