<div class="text-effect">
  <!-- Select the text in the preview and type in your own -->
  <h1 class="neon" data-text="Neon" contenteditable>Neon</h1>
  <div class="gradient"></div>
  <div class="spotlight"></div>
</div>
// Change the colors
$color1: red;
$color2: blue;

.text-effect {
  overflow: hidden;
  position: relative;
  
  // The blend modes mute the colors, so let's bump them up
  filter: contrast(110%) brightness(190%);
}

.neon {
  position: relative;
  
  // Only works on a black background, sorry
  background: black;
  
  // The actual text inside the div is superfluous, only data-text matters. The text is added so you can easily edit the preview
  color: transparent;
  
  &::before,
  &::after {
    // Add two copies of the text on their own layer
    content: attr(data-text);
    
    // White, so we can paint them later
    color: white;
    
    // And blur them to create the neon effect with the blend-mode below
    filter: blur(0.02em);
    
    position: absolute;
    top: 0; left: 0;
    pointer-events: none;
  }
  
  // Set the top copy to difference. This creates the knock-out effect with a bit of glow
  &::after {
    mix-blend-mode: difference;
  }
}

// Position our two effect layers
.gradient,
.spotlight {
  position: absolute;
  top: 0; left: 0; bottom: 0; right: 0;
  pointer-events: none;
  z-index: 10;  
}

// Add the colors
.gradient {
  background: linear-gradient(45deg, $color1, $color2);
  
  // Multiply mode will paint only the white text
  mix-blend-mode: multiply;
}

.spotlight {
  animation: light 5s infinite linear;
  
  // These are the lights, color-dodge needs a black bg for optimum effect
  background: 
    radial-gradient(circle, white, transparent 25%) 0 0 / 25% 25%, 
    radial-gradient(circle, white, black 25%) 50% 50% / 12.5% 12.5%;
  top: -100%; left: -100%;
  
  // Color dodge gives the lights that shimmer effect
  mix-blend-mode: color-dodge;
}

@keyframes light {
  100% {
    transform: translate3d(50%, 50%, 0);
  }
}

//=== Pen styling, ignore

// Style text
.neon {
  font: 700 220px 'Lato', sans-serif;
  text-transform: uppercase;
  text-align: center;
  margin: 0;
  
  &:focus { outline: none; border: 1px dotted white; }
}

// Center everything
body {
  background: black;
  display: flex;
  min-height: 100vh;
  justify-content: center;
  align-content: center;
  align-items: center;
}
// This is just to auto-update the data-text if you're editing it directly on the page and is not required for the actual effect
$('[data-text]').on('keyup', function(){
  $(this).attr('data-text', $(this).text());
});

External CSS

This Pen doesn't use any external CSS resources.

External JavaScript

  1. https://cdnjs.cloudflare.com/ajax/libs/jquery/3.1.1/jquery.min.js