“The Cloud” has evolved from a budding innovation in tech to one of the largest factors driving growth in the technology sector in only a few years. Today, cloud computing is an integral part of software-related firms, which in turn has seen investors search for cloud-focused tech stocks.
In our increasingly on-the-go and mobile world, cloud computing has dramatically reshaped the way companies conduct business. The technology allows firms big and small, as well as individuals, to access all their vital information nearly anywhere. Cloud computing like the smartphone, is hardly a fad, and it seems nearly impossible to think that people will reverse course—unless the cybersecurity concerns become too high.
Think how much market share Amazon’s AMZN AWS cloud business was able to gain based on its significant head start into the now booming market over rivals and fellow giants Microsoft MSFT, IBM IBM, and Google GOOGL. With this in mind, we have highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics.
Check out these three Zacks buy-ranked cloud stocks to consider right now.
1. Twilio TWLO
Twilio’s cloud communication platforms and services handle calls, text messages, videos, web and mobile chats, and call-centers. TWLO’s APIs allow firms to “outsource” these tasks to its cloud service so they can focus on the development of their core business. The Communication Platforms-as-a-Service firm boasts clients such as Intuit INTU, Yelp YELP, VMware VMW, and many more. The firm has seen its stock price soar over 46% this year to sit near its 52-week high.
TWLO’s fourth-quarter revenue soared 77%, with full-year 2018 revenue up 63% to $650.1 million. Looking ahead, this growth is expected to continue. Our current Zacks Consensus estimates call for the company’s adjusted Q1 earnings to skyrocket 125% on the back of 73% revenue expansion. Twilio’s full-year 2018 revenue is projected to surge over 66% to reach just over $1 billion, with massive triple-digit bottom-line growth expected in fiscal 2020. The company is currently a Zacks Rank #2 (Buy) and operates a business that is only set to become more popular in the digital age.
2. Veeva Systems Inc. VEEV
Veeva makes cloud-based solutions for the pharmaceutical and life sciences industries. Its main offerings are presented in a software-as-a-service model and deliver industry-specific tools for CRM, content management, and many other enterprise applications. The company is projected to see its first quarter fiscal 2020 revenue jump over 22% to reach $238.7 million. Veeva’s full-year revenue is expected to surge nearly 20% to touch $1.03 billion.
Meanwhile, at the bottom end of the income statement, the company’s adjusted Q1 earnings are projected to jump over 36%. The firm has experienced a ton of positive earnings estimate revisions recently that help it earn a Zacks Rank #2 (Buy). Veeva also sports a “B” grade for Growth in our Style Scores system and has seen its stock price surge 38% in 2019, which helps it rest near its all-time high.
3. Equinix, Inc. EQIX
Equinix is a data center-focused Real Estate Investment Trust (REIT) that is a Zacks Rank #2 (Buy) at the moment. The Redwood City, California-based firm posted funds from operations of $414.1 million, or $5.13 per share, last quarter, which topped our estimate. Equinix is a company that gives investors exposure to the cloud computing business and dividends--which many actual cloud-focused companies do not. And Equinix reportedly captured 48% of the Fortune 500 and has seen its stock price jump 26% this year.
The firm has paid out total dividends of $9.30 a share over the last year. EQIX has also consistently raised its quarterly payout by roughly 15% every year over the past few years and currently has a dividend yield of 2.22%. Investors should also note that the company is actively expanding its business around the globe as the cloud and data center revolution rages on. Equinix is projected to see its current-quarter revenue jump 10.6%, with full-year revenues expected to climb 9.5% to reach $5.55 billion. The cloud-focused REIT is also expected to see its adjusted funds from operations jump between 10% to 13% this year.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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International Business Machines Corporation (IBM) : Free Stock Analysis Report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Yelp Inc. (YELP) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Twilio Inc. (TWLO) : Free Stock Analysis Report
Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
Equinix, Inc. (EQIX) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
VMware, Inc. (VMW) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
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