Identifying promising investment opportunities is a continuous endeavor. While various sectors merit consideration, I prioritize artificial intelligence (AI) equities. Given that this technology remains in its nascent phase, it holds the potential to profoundly reshape society. Innovations such as autonomous vehicles, humanoid robotics, unmanned drones, and conversational AI agents represent just a fraction of the products and services poised to scale rapidly alongside AI’s evolution.
Consequently, my two primary acquisitions for 2027 are deeply rooted in this transformative theme. I currently hold positions in both companies and plan to significantly increase my exposure in 2027.
1. Iren
Iren (NASDAQ: IREN) stands out as my preferred neocloud equity. While Nebius (NASDAQ: NBIS) is a formidable competitor and currently edges Iren in revenue recognition, I find it difficult to justify Nebius possessing a market capitalization nearly four times that of Iren.
The neocloud investment thesis is straightforward: hyperscalers require robust computational infrastructure, and firms like Iren construct the data centers that furnish these tech giants with essential chips, power, software, and facilities.
Iren concluded its fiscal 2026 fourth quarter with $1 billion in operating annual recurring revenue. The company projects reaching $4 billion in annual recurring revenue by the end of 2026. As Iren strategically awaits substantial contracts, the per-unit value of compute continues to ascend. Its landmark five-year, $9.7 billion agreement with Microsoft equates to $9.7 million per megawatt-year. Iren is currently negotiating new deals at $25 million per megawatt.
If Iren successfully secures $25 million per megawatt across its entire 5.8-gigawatt portfolio, the company could generate $145 billion in annual recurring revenue, assuming the per-megawatt valuation remains stable.
While some investors express concern over escalating capital expenditures, I do not view this as a significant hurdle. Iren secures prepayments covering 45% to 55% of each contract, which facilitates the funding of data center construction. Additionally, the company can leverage GPU financing and borrow against its data centers to prevent further shareholder dilution.
2. Netlist
I gravitate toward smaller AI equities, and Netlist (OTC: NLST) fits this profile perfectly with its $2 billion market capitalization. The company is developing Compute Express Link (CXL) solutions that could become a vital component of future AI infrastructure. Although Netlist generates substantial revenue by reselling memory products, its patent portfolio offers immediate upside potential.
Following an extensive patent infringement legal battle, the company secured a strategic agreement with Samsung. Under this deal, Samsung must pay a $239 million up-front licensing fee alongside quarterly royalty payments of up to $32.9 million for five years. Furthermore, Netlist retains the right to purchase up to $300 million in Samsung memory products annually for five years, ensuring chip availability during periods of severe supply constraints.
The total five-year contract could yield up to $897 million in gross license revenue, inclusive of the up-front fee. Nearly all of this revenue translates directly to profit, as Netlist will no longer bear the heavy burden of litigation costs. The company is currently pursuing analogous actions against Micron Technology, which could result in another highly lucrative agreement, particularly following its success with Samsung.
Some investors liquidated their positions upon hearing that Netlist lost its patent appeal against Micron. However, losing that specific case is entirely distinct from the critical patents Netlist utilized to secure the Samsung deal. Micron remains liable for $445 million in the ongoing patent infringement case, which serves as a major catalyst for Netlist’s stock.
The growth stock dropped by over 20% on that news, a reaction I believe was entirely misguided. Losing one patent dispute does not equate to losing the critical patents that could compel a strategic settlement similar to the one Netlist secured with Samsung.
