I would always suggest a dedicated server if your budget allows

Check out these threads too:

And there’s quite a few dedicated server companies mentioned in this one:

The deployment tag may be of interest too

Start with this one, simulate the load that you expect, then maybe pick a bigger/smaller box and repeat the simulation. The good thing about virtualized environments is that you can add more boxes like this later if needed very quickly.

Thank you @AstonJ I will read those threads

Thank you. How do I simulate the load? What tool can I use to achieve that?

You can use tsung.

Both tsung and wrk are good. I tend to prefer wrk for higher loads (it is far more efficient), and it uses lua for scripting.

I would recommend Gatling for more real benchmarks, simulating real user actions instead of raw performance