Are These The Best Cloud Stocks To Invest In Right Now?
Cloud stocks, while not immediately in the minds of most investors now, remain a viable play in the stock market today. For the most part, this would be evident among the leading names in the tech world. All of which have a hand in the booming cloud computing business now. Accordingly, there is also a rising demand for cloud-related services across the board as well. This would be understandable as the cloud is a revolutionary area of tech, allowing for virtual storage of data without the need for physical servers. In practice, some would argue that this is a prime convenience for our data-driven world today.
For instance, we could take a look at the largest name in the business Amazon (NASDAQ: AMZN). Sure, most would be familiar with the company’s industry-leading e-commerce offerings. However, its Amazon Web Services (AWS) subsidiary is a titan in the cloud computing space as well. In its latest quarterly earnings update, Amazon raked in a whopping $17.8 billion in AWS revenue alone. This tops analyst estimates of $17.37 billion. For reference, this represents a sizable 40% year-over-year jump for the company. In terms of earnings per share, Amazon smashed estimates of $3.57 with earnings of $5.80. Even with the expected slowdown in its core digital retail services, the company notes that its cloud and advertising businesses powered growth for the quarter.
Meanwhile, there are plenty of other names to consider among cloud stocks as well. A prominent part of the industry now would be firms that cater to corporate customers. This would include firms such as Salesforce (NYSE: CRM) and CrowdStrike (NASDAQ: CRWD). Overall, it seems to be an exciting time for the cloud industry. On that note, here are three to consider in the stock market now.
Top Cloud Stocks To Buy [Or Sell] This Month
- Microsoft Corporation (NASDAQ: MSFT)
- Alphabet Inc. (NASDAQ: GOOGL)
- Shopify Inc. (NYSE: SHOP)
Microsoft
Microsoft is a cloud company that enables digital transformation for many companies and businesses. In fact, in an era of intelligent cloud and intelligent edge, it aims to empower every person and organization as we move to a more digitalized world. A substantial chunk of its revenue also comes from its software products like Microsoft Windows and also its Microsoft Office suite.
On January 25, 2022, the company announced its second-quarter financials. Firstly, revenue for the quarter was $51.7 billion, increasing by 20% year-over-year. The company says that this is due to solid commercial execution, backed by strong bookings growth. Operating income was $22.2 billion, increasing by 24% compared to a year earlier. Secondly, its net income was $18.8 billion, or a diluted earnings per share of $2.48.
“Digital technology is the most malleable resource at the world’s disposal to overcome constraints and reimagine everyday work and life,” said Satya Nadella, chairman and chief executive officer of Microsoft. “As tech as a percentage of global GDP continues to increase, we are innovating and investing across diverse and growing markets, with a common underlying technology stack and an operating model that reinforces a common strategy, culture, and sense of purpose.” The company also says that its recent acquisition of Activision Blizzard (NASDAQ: ATVI) will not be blocked by the U.S. Federal Trade Commission, giving assurance to investors. All things considered, would MSFT stock make your list of top cloud stocks to buy right now?
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Alphabet
Alphabet is the parent company of Google and is a multinational technology conglomerate holding company. It is one of the largest technology companies in the world by revenue and also one of the world’s most valuable companies. Notably, its Google Cloud is used by leading businesses all over the world. It allows companies to run their apps whenever they need them through its open-source, multi-cloud, and hybrid cloud systems.
On Tuesday, the company announced its fourth-quarter and fiscal year 2021 results. Diving in, revenue for the quarter was $75.32 billion, increasing by 32% year-over-year. Net income was $20.64 billion or a diluted earnings per share of $30.69. The company says that this quarter’s earnings show broad-based strength in advertiser spending and strong consumer online activity, as well as substantial ongoing revenue growth from Google Cloud. It also says that its investments have helped driven growth by delivering services that people and businesses need.
The company also continues to invest in AI technologies to drive extraordinary and helpful experiences for its users across its most important products. It also reported a quarterly sales record of its Pixel phones despite supply constraints. With that in mind, is GOOGL stock worth adding to your portfolio today?
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Shopify
Another business that focuses on the cloud now would be Shopify. Sure, most may not exactly think of Shopify when considering cloud stocks. However, the company’s main business is completely cloud-based and hosted. Through its operations on the cloud, the company caters to over 1.7 million merchants across 175 countries worldwide. The likes of which posted a cumulative gross merchandise volume (GMV) of about $400 billion in its latest quarterly update. With the current scale of Shopify’s operations, investors could be eyeing it amidst the recent volatility in tech stocks.
For one thing, Shopify is set to report its fourth-quarter financials later this month on February 16, 2022. Ahead of that, the company does not seem to be slowing down on the operational front at all. To begin with, Shopify appears to be keen on expanding its offerings in the apparel market. This is evident from its latest patent win. According to Business Insider, the company was recently granted a patent for augmented reality (AR) body-measuring tech. In practice, this would serve to help customers take body measurements and determine clothing sizes remotely. Should Shopify merchants receive access to this tech, it would provide a new level of convenience for shoppers.
Additionally, the company is also currently working with JD.com (NASDAQ: JD), a leading player in the Chinese e-commerce market. Through the current deal, the duo are helping U.S. merchants sell their goods to consumers in China. Safe to say, Shopify would stand to benefit from gaining access to JD’s customer base of over 550 million active users. With all this in mind, will you be adding SHOP stock to your February watchlist?
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