Cloud Computing Stocks to Buy
These companies are not merely games in the cloud industry. They provide infrastructure platforms and services to businesses who want to improve their operations, complete with an ecosystem of software, often in partnership with other software-as-a-service providers. In addition, these ETFs include growth stocks that benefit from the growing adoption of cloud computing, including companies that offer or develop IaaS, PaaS and SaaS. These three stocks with three different areas of cloud computing have performed well in a challenging environment and have good prospects for healthy growth in the future.
Cloud companies are at the forefront of shifting computing power to a distributed Internet model and are expected to grow over the next few years, with four of the five largest exchange-traded funds covering space or reaching record highs rapidly. One of the leading exchange-traded cloud funds is the Global Cloud Computing ETF (CLOU), launched in 2019 and invests in companies that will benefit from the growing adoption of cloud computing technology, including companies whose main businesses include software as a service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure as a Service (IaaS). Its holdings include IT, infrastructure, cloud, real estate, manufacturing, consumer and communications services stocks and offer investors broad and diverse exposure to publicly traded cloud names in several broader industry sectors.
Founded in 1985, Altair Engineering (ALTR) provides cloud-based solutions and products for designing and engineering business services, data analysis, IoT, and other computer applications. The company specializes in over 170 products, including its hybrid cloud platform, integrated platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) for small and large businesses. Last month BSM-provider Coupa Software Inc. teamed up with Japan Cloud, Japan’s leading cloud computing market in Asia, to give a fast-growing Japanese company a cloud computing platform, Coupa KK.
Tesla Inc. (TSLA), which makes up 10.65% of the portfolio, is an electric vehicle manufacturer and is considered a cloud company because it sells software updates over the Internet and provides other cloud-based services. Alibaba (Alibaba Cloud) is known for providing cloud computing services to online businesses and the company’s e-commerce ecosystem. With over 3 million subscribers, it is a pioneer in digital transformation, and its cloud platform is transforming the way businesses and customers interact.
Unlike traditional computing companies, IBM’s cloud segment was boosted by the acquisition in 2019 of the Red Hat development platform, which is now one of the largest cloud computing companies in the world. Salesforce is a cloud-based CRM application for sales, services, and marketing that does not require IT, experts to set up and manage. Salesforce’s flagship, Customer 360, is a suite of cloud-based applications that organize your business data in one single customer view.
Shopify Inc. is No. 9 in our list of best cloud computing stocks to invest in. Shopify provides a platform that helps entrepreneurs market their goods. Software-as-a-Service (SaaS) – SaaS provides users with access to vendor-based software applications through a subscription model. Prominent cloud computing companies provide secure and efficient software and services at a reasonable price.
Last year, cloud inventories soared with the rapid and unexpected transition to a remote workforce. Companies launched products that help their employees work together remotely and access data stored in physical data centers. Companies in all industries benefit from cloud computing because they can use the technology to conduct business remotely. In addition, companies that have been hesitant to digitize recognize the myriad benefits of moving their business to the cloud.
Like Microsoft (MSFT) and its Office productivity suite, some companies already use cloud-based business models for older applications. But cloud computing companies have limited product lines, markets, financial resources and human resources. In addition, they are exposed to the risks of changing business cycles and a world of economic growth, technological advancement and government regulation. So, as with any high-growth stock invested in cloud companies, there are bumps in the road.
Mobile telephony and modern video interactions have been serious disruptors for traditional telecommunications companies for years. As access to the Internet expands, and contact is no longer coupled, phone companies will increasingly prefer cloud software providers. As technology stocks continue to rotate, cloud companies will be harder for investors to sell, even among the best performers of recent years.
The cloud-based software company offers a video-first platform for communication. The Global Cloud Computing ETF CLOU, + 1.4% 0.68% 3.6% represents the global index based on the market cap of companies active in cloud computing. WisdomTree Cloud Computing Fund WCLD, -1.3% -0.45% 5.7% A track weight index of US companies focusing on cloud software and services.
The fund has a broad definition of cloud companies and focuses on revenue growth. As a result, ETFs tend to hold smaller cloud companies with high growth potential. On April 9th, 2021, we started with 36 Global Cloud Computing ETF holdings to identify the 14 best cloud computing stocks to invest in. We then narrowed our list of the best cloud stocks based on the sentiment of hedge funds.
Microsoft Azure is a cloud computing service that enables other businesses to develop, test, share and manage cloud-based applications and services. The fund invests in cloud computing companies that rely on the Internet and use a distributed network of servers on the Web. For example, trade Desk (TDG 432.16) is a cloud-based platform that manages digital ad purchases whether they are displayed on PCs, phones, TVs or any media company.