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Best Cloud Computing Stocks of 2023 The Motley Fool

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WDAY is led by its founders who own 25% of the company – Chairman David Duffield is an industry pioneer previously founding Peoplesoft (eventually acquired by Oracle) while CEO Aneel Bhusri was Vice Chairman of Peoplesoft.” In the second quarter of the fiscal year 2021, the company’s revenue increased 355% to $663.5 million. The company has a market cap of $121.29 billion and currently offers a dividend yield of 4.80%. The hedge fund run by Peter Rathjens, Bruce Clarke, and John Campbell is the most significant stakeholder of the company with 2.7 million shares, with $344 million. Despite massive internet growth in the past decade, just over half of marketing spending takes place in a digital format.

  • The demand for cloud computing technology was already breaking records before the COVID-19 pandemic.
  • Cornerstone’s Milan expects advertising growth to slow in the second half of 2020.
  • Cloud computing technology provides on-demand services such as networking, storage, databases and applications through the Internet.
  • This far exceeds the forecasted 19% compound annual growth rate for the industry predicted by Grand View Research.

For investors not interested in attempting to pick the best cloud stocks, exchange-traded funds (ETFs) are also an option. The First Trust Cloud Computing ETF (SKYY -1.63%) is the largest cloud ETF around, with about $2.9 billion in assets under management. The fund is a basket of 64 cloud infrastructure and software stocks. It has an ETF expense ratio of 0.6%, meaning it costs $6 per year for every $1,000 invested. While Oracle’s shift to the cloud has been relatively slow, it is still a lucrative investment for those looking to benefit from the cloud computing boom. The latest stock momentum and initiatives like free cloud services are expected to further drive the stock’s value in the coming quarters.

Zoom Video Communications

Feel free to ask questions of other members of our trading community. We realize that everyone was once a new trader and needs help along the way on their trading journey and that’s what we’re here for. Also, we provide you with free options courses that teach you how to implement our trades as well. Cloudflare expects to grow its EPS at 54% annually over the next 3-5 years and Zscaler is projecting 40% annual growth in EPS. Put it all together, it’s no surprise Stifel analyst Matthew Sheerin (Buy) says HPE’s “current valuation gives the company little credit for the work done since spinning out from HP Inc.” In 2015, Hewlett-Packard spun off its business-focused server, storage and networking operations into Hewlett Packard Enterprise (HPE, $16.85).

Now that we have moved passed the extreme bearishness, investors should again focus on long-term trends rather than, week to week moves. Admittedly, interest rates on long-term treasuries were reaching 16-year highs, and the Fed was sounding increasingly hawkish, but the signs of an imminent rally were forming. I personally noted a key technical level holding in the Nasdaq 100, sentiment was loudly bearish, and seasonality trends were strongly in favor of a bullish second half of October and Q4.

  • The COVID-19 pandemic further highlighted the demand for cloud computing services given their flexible costs, scalability, and efficiency.
  • In 2024, cloud will continue to be a dynamic and exciting driver of innovation and opportunity.
  • Let’s take a look at three top names in this sector that are worth buying right now.
  • Oracle’s cloud initiatives are helping it to offset the weak performance of its on-premises business.
  • The cloud increases a company’s flexibility, often unlocks cost savings, and helps them get more done with the data they have on their operations and customers.

Its document-based model is a natural fit for AI applications due to its flexibility and versatility. Moreover, AI applications need the ability to scale data processing, parallel computations and high performance. And MongoDB offers sharding and auto-scaling features that enable scaling. The reaction to Adobe’s earnings report came as a result of the company’s weaker-than-expected current-quarter and full-year revenue guidance.

Best Cloud Computing Stocks To Invest In

Cloud computing is also closely tied to other tech developments such as mobile 5G networks, the Internet of Things, and artificial intelligence. By the end of the fxcm canada review decade, some estimates put total annual global cloud spending at $1 trillion. Cloud computing stocks are a top investment theme for 2021 and the decade ahead.

Cloud Services Stocks: The Key to Outperformance in 2024?

In short, Alibaba is well set to capitalize on the increasing demand for cloud services in the region. The company recently announced its plans to establish a new data center in Philippines by the end of 2021. Meanwhile, it has already launched its third data center in Indonesia, as a part of its strategy to boost its cloud share in the region. Companies are increasingly utilizing cloud computing services to access these new technologies. Additionally, others are shifting to cloud solutions like Infrastructure as a Service (IaaS) and Software as a Service (SaaS) to reduce costs and achieve operating efficiencies.

Telemedicine has been taking off during the pandemic, and Shipchandler believes this business will remain after the pandemic is over. Deutsche Bank’s Taylor McGinnis (Buy) believes the company can continue to expand its sales at more than just2trade broker review 30% each year. Even if workers return to offices, the convenience of e-documents should keep growth high. Since then, DocuSign’s usefulness has expanded rapidly, with most of the Fortune 500 now boasting the ability to use its software.

And when a company has made the list for nine consecutive years, that’s worth noting. In the company’s fiscal fourth quarter, HPE’s GreenLake orders were up 46% year-over-year (YoY) and its as-a-service annualized revenue run-rate (ARR) rose 36% from the year prior. Of course, with regard to cloud computing, HPE offers GreenLake Cloud Services. These provide HPE’s clients with an on-demand IT infrastructure to be used for machine learning (ML), big data, private cloud, data protection and more.

#3. Google (GOOG)

Zoom provides a cloud platform for video and audio conferencing, chat, and webinars. During the COVID-19 pandemic, the cloud platform provided an avenue for most company’s regular conferences raising its total user base to more than 200 million in March 2020. In Europe alone, the number of installs was 124.7 million, up 2,670% compared to 2019. The company recently announced a partnership with one of the highest class auto racing cars worldwide, Formula One, to deliver communication services during the 2021 Formula One World Championship. To help you make informed investment decisions, Benzinga compiled a list of the best cloud computer stock picks. These companies have demonstrated strong growth potential, solid financials, and a competitive edge in the cloud computing market.

Cloud computing refers to the delivery of different services over the internet. Those services range from data storage and servers to networking and software. Snowflake holds lots of data that customers can leverage in their AI applications. The product enables customers to use natural language to query unstructured data such as invoices and legal contracts.

Stocks That Are Down Big, But Are Due to Fall Much Further

Atlas ended the quarter with over 43,500 customers compared to 35,500 in the previous year period. Then on top of cloud computing and security, AI power users are going to require robust data storage and manipulation capabilities. That’s where Datadog (DDOG Quick QuoteDDOG – Free Report)  and MongoDB (MDB Quick QuoteMDB – Free Report)  come in. With the smallest market value of all the cloud stocks covered here, DigitalOcean Holdings (DOCN, $53.67) might also be the most exciting. The stock is rated an overall Strong Buy by Koyfin’s survey of 48 analysts. Fifteen of them rate shares a Strong Buy, 32 rate GOOGL a Buy and one rates it a Hold.

Of course, Microsoft has the financial wherewithal to do this – it boasted cash and short-term investments worth more than $137 billion at the end of March. It also grew revenues 13% year-over-year in the June quarter, to $38 billion, and earnings of $1.46 per share, while off YoY, were better than what analysts expected. This is a high-growth industry that’s being bid up to the … well, clouds. Valuations are sky-high, and pullbacks across the space certainly are possible. But the technology has staying power; companies won’t quickly ditch the benefits they’re capturing from cloud apps after offices re-open, if they ditch them at all. Thus, many cloud stocks’ opportunities should extend well into the future.

Dropbox does benefit from a sticky userbase and will likely continue to grow paid users and upsell existing paid users, driving consistent cash flows and modest growth. However, I determined that Dropbox’s long-term outlook is likely not as attractive as I originally anticipated as the strength of Microsoft’s bundle became clearer post-COVID. Perhaps Dropbox will follow a similar path as Slack and be an acquisition target, though that is not an investment thesis I want to rely on. Dropbox may still have a bright future, but as in any investing decision, when compared to other opportunities available at the time, I made the decision to reallocate to what I believed to be more attractive opportunities.” Let’s take a look at three top names in this sector that are worth buying right now.

As such, Shopify occupies an important place on this list of the best cloud stocks for 2022. “Shopify is well positioned as the leading cloud-based commerce platform,” says Baird analyst Colin Sebastian (Outperform). SHOP “remains in the early stages of a large market opportunity, and is leveraged to extremely attractive growth industries (e-commerce and cloud),” he adds. In fact, the company’s share price dropped roughly 20% in its first three months as a standalone firm, bottoming near $7 on Jan. 20, 2016. However, six years later, with a trailing one-year return of 24.4%, there are good reasons for investors to have HPE on their list of the best cloud stocks for 2022 and beyond. The company specializes in multilayer network switches, which are needed for software-defined networking – an important component of cloud computing.

The company was founded in 2003 and spent its earliest years primarily serving the real estate industry. In addition to taking signatures, its technology maintains a record of where documents have gone and what was done with them. It has caught the eye of Stifel’s Gur Talpaz (Buy) because it has been able to double revenues each of the past four years – and could do so again this year, even amid the responsive web design pandemic. Talpaz recently increased his 2021 revenue estimate to $761 million. “With heightened fragmentation across workloads, the opportunity to scale into arenas like cloud (virtual machines/containers), IoT, and mobile drastically increases the potential size of deployments,” Talpaz writes. Crowdstrike (CRWD, $103.60) illustrates how the cloud has transformed the computer security industry.

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