12 Best Cloud Stocks To Buy Now
In this article, we're going to take a look at 12 best cloud stocks to buy now. To see more stocks that made our list, you can skip ahead and take a look at the 5 best cloud stocks to buy now.
Should you invest in cloud computing?
If you don't give it much thought, what is the latest tech trend that comes to your mind. Your answer is probably going to be Artificial Intelligence. AI seems to have taken the world by storm and is quickly making its way disrupting pretty much every aspect of our lives. Therefore, it's probably a good idea to look into AI companies as a potential investment opportunity. If you agree, then here's a list of best artificial intelligence stocks to buy according to hedge funds.
However, we cannot talk about AI as a standalone industry, it relies on other technologies and one in particular that deserves some attention is cloud computing. Cloud computing is one of the most important technologies that provide the massive processing power that any AI model needs to operate properly. Cloud of course, in its turn, relies on chips and other hardware, which rely on various materials that need to be extracted and processed and so on, but let's not get sidetracked.
Besides AI, cloud computing is also very relevant in other important areas of our lives that have been picking up speed recently, such as Internet of Things. Pretty much any process that does or will involve processing vast amounts or data quickly will be reliant on cloud computing. In addition, more and more businesses choose to move their operations into the cloud to improve their efficiency. As the pandemic hit, the trend of switching over to cloud has accelerated as remote work required employees being able to access company data and platforms quickly over the Internet. As many businesses noticed that remote work did not harm (and in many cases even improved) their operations, they chose to continue the Work from Home "tradition" and cloud computing will help them stay on this path.
All in all, that's why some estimates, such as this one by Fortune Business Insights, predict that cloud computing market will reach over $2.0 trillion by 2030 from roughly $569 billion.
Therefore, the short answer to the above question, is yes, you definitely should consider investing in cloud stocks and we will show you what are the best cloud stocks to buy now according to smart money investors.
How to pick best cloud stocks to invest in?
When it comes to cloud stocks, there are a lot of areas to choose from. If you want more of a pick-and-shovel approach, you can always look at semiconductor stocks, such as NVIDIA Corporation (NASDAQ:NVDA) or Intel Corporation (NASDAQ:INTC) and other hardware companies. Or if you want direct exposure to cloud computing, you can go through companies that are solely focused on cloud operations. For example, Adobe Inc (NASDAQ:ADBE), which, as you'll see below, is one of the best cloud stocks to buy now. The company in 2011 launched a strategy to rebuild itself as a cloud company and since then provides its software suite known as the Creative Cloud. Other examples would be ServiceNow Inc (NYSE:NOW), which also provides a Platform-as-a-Service that helps other businesses migrate their operations to the cloud, Workday Inc (NASDAQ:WDAY), and Salesforce Inc (NYSE:CRM).
However, we cannot talk about best cloud stocks to buy now without the big three companies, Microsoft Corp (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc (NASDAQ:GOOGL). These are not only some of the largest companies in the world, but are also three largest providers of cloud services, Microsoft Azure, Amazon Web Services, and Google Cloud are the largest providers of cloud infrastructure and services. Besides, Microsoft Corp (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc (NASDAQ:GOOGL), two other companies that provide an entire cloud ecosystem to their customers are International Business Machines Corporation (NYSE:IBM) and Oracle Corp (NYSE:ORCL).
Of course, we cannot overlook the fact that both International Business Machines Corporation (NYSE:IBM) and Oracle Corp (NYSE:ORCL), as well as Microsoft Corp (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc (NASDAQ:GOOGL) are quite diversified and well-exposed to other industries, and cloud only represents a part of their revenue, but they are definitely leading the industry when it comes to infrastructure and provided services.
Photo by Taylor Vick on Unsplash
Our Methodology
In order to identify the best cloud stocks to buy now, we looked at the companies with significant exposure to the industry and then picked those that rank as the most popular among hedge funds. Even though many of the companies in the list, including Microsoft Corp (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc (NASDAQ:GOOGL), aren't cloud pure plays, diversification across various sectors is what makes them the best stocks to invest in.
12. International Business Machines Corporation (NYSE:IBM)
Our list of best cloud stocks to buy now starts with International Business Machines Corporation (NYSE:IBM). The tech giant has been around for more than a century and has recently been focused on cloud and AI. The company's leading cloud platform, OpenShift, grew by 30% on the year and generated $1.1 billion in annual recurring revenue in the second quarter of 2023. International Business Machines Corporation (NYSE:IBM) has also been focusing on its hybrid cloud and AI strategy, and to advance it made a number of acquisitions earlier this year. In the first quarter, it purchased NS1, a provider of network automation SAAS solutions and during the second quarter it acquired Ahana Cloud, which provides open-source-based solutions for data analytics, cloud security company Polar Securiy, and Agyla SAS, a France-based provider of cloud platorm engineering services.
At the end of the third quarter, there were 53 funds tracked by Insider Monkey that held long positions in International Business Machines Corporation (NYSE:IBM) with a total value of $843.12 million.
11. Workday Inc (NASDAQ:WDAY)
W0rkday Inc (NASDAQ:WDAY) is a cloud-based provider of financial and human capital management applications that aim to help businesses analyze and plan their operations. The company's stock has appreciated by more than 20% since the beginning of the year, as it reported strong results. In its last quarter, Workday Inc (NASDAQ:WDAY) delivered revenue of $1.79 billion, up by 16.3% on the year. Workday Inc (NASDAQ:WDAY) also raised its revenue guidance for the full fiscal 2024, expecting between $6.57 billion and $6.59 billion.
During the third quarter of 2023, the number of bullish investors in Workday Inc (NASDAQ:WDAY) among the funds in our database appreciated to 77 from 71.
10. Intuit Inc. (NASDAQ:INTU)
Next on our list of best cloud stocks to buy now is Intuit Inc. (NASDAQ:INTU). Intuit offers its customers a suite of financial management and compliance products, as well as specialized tax products aimed for accounting professionals. The company's products are available both as desktop versions, but also online, such as QuickBooks Online, Mailchimp, TurboTax Online, ProConnect Tax Online, Credit Karma, and Mint. The company's online products are all operated via public cloud providers, including Amazon.com, Inc. (NASDAQ:AMZN)'s AWS and Alphabet Inc (NASDAQ:GOOGL)'s Google Cloud. In fiscal 2023 (ended September 1), Intuit Inc. (NASDAQ:INTU) reported revenue of $14.37 billion, a 13% growth that was driven by its online ecosystem growth.
At the end of June, there were 86 funds tracked by Insider Monkey that held shares of Intuit Inc. (NASDAQ:INTU) with a total value of $6.15 billion
9. Broadcom Inc (NASDAQ:AVGO)
Then there's Broadcom Inc (NASDAQ:AVGO), in which 87 funds tracked by Insider Monkey disclosed long positions as of the end of September, up 15 over the quarter. Broadcom Inc (NASDAQ:AVGO) provides hardware and software solutions that are used in various segments, including cloud computing. Recently Broadcom Inc (NASDAQ:AVGO) has solidified its presence in the cloud segment by completing the acquisition of VMware, a cloud computing services provider. The acquisition will allow Broadcom Inc (NASDAQ:AVGO) to modernize their cloud environments by leveraging the VMware Cloud Foundation software.
8. Oracle Corp (NYSE:ORCL)
In the latest round of 13F filings, 88 hedge funds reported long positions with a total value of $4.70 billion worth of Oracle Corp (NYSE:ORCL) stock, an increase from 84 funds and $3.40 billion in shares a quarter earlier. Oracle Corp (NYSE:ORCL) is betting on the expansion of its cloud business. In its latest quarterly 10-Q report, Oracle Corp (NYSE:ORCL) said that it expects its cloud revenue to increase as well as the proportion of its cloud revenue relative to the total revenue. For the third quarter, Oracle Corp (NYSE:ORCL) reported total revenue of $12.45 billion, of which $9.55 billion represented cloud services and license support and $809 million came from cloud license and on-premise license. By comparison, for the same period of last year, the company reported revenue of $11.45 billion with Cloud services and license support, and Cloud license and on-premise license representing $8.42 billion and $904 million, respectively.
7. ServiceNow Inc (NYSE:NOW)
ServiceNow Inc (NYSE:NOW)'s stock has recently seen a 7% spike driven by the company reporting its financial results and guidance. The cloud software provider reported third-quarter subscription revenue of $2.2 billion, up by 27% on the year and topping the consensus estimate of $2.19 billion. Its EPS of $2.92 was higher than the expected $2.55. The company also raised its full-year guidance and now expects subscription revenue around $8.64 billion versus the previous forecast of $8.6 billion. During the earnings call, CEO Bill McDermot said that the company "once again delivered beyond expectation."
As of the end of September, 99 hedge funds hold long positions in ServiceNow Inc (NYSE:NOW), up by six over the quarter.
6. Alibaba Group Holding Ltd - ADR (NYSE:BABA)
The Chinese tech giant saw 110 funds tracked by Insider Monkey holding long positions as of the end of September, down from 112 funds a quarter earlier.
Alibaba Group Holding Ltd - ADR (NYSE:BABA) is well diversified across a variety of industries in China and cloud is one of them. Alibaba Cloud is one of the largest cloud providers in Asia Pacific region. In the second quarter, Alibaba Group Holding Ltd - ADR (NYSE:BABA) recorded revenue of $3.47 billion for its Cloud Intelligence Group, up by 4% on the year. Besides Alibaba Cloud, the segment also includes collaboration platform DingTalk. The company also reiterated its commitment to advance its cloud technology further and use it to advance its AI strategy.
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