Are These The Best Cloud Computing Stocks To Buy Now?
Cloud computing stocks have been a bright spot during the coronavirus pandemic. The cloud computing industry has gained a special place in the stock market today. It’s no surprise that investors who are hungry for growth love these cloud computing companies. That’s because the market is expanding as more companies migrate their infrastructure to cloud platforms, replacing their on-premise software with cloud-based services. Gartner expects global spending on public cloud computing, excluding private data center cloud computing, to grow 6% in 2020 and breach $250 billion. Subsequently, it could grow to over $360 billion in annual spending by 2022.
Perhaps you already like technology companies when it comes to investing. The high growth potential of top cloud computing stocks have certainly stood out this year. This is because these companies are well insulated from headwinds like the trade war and the coronavirus pandemic. In fact, the ongoing pandemic is actually generating tailwinds for some cloud computing companies as more people continue to work and learn from home. This means there are more users of cloud computing services.
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Where To Look For High Growth Cloud Stocks To Invest?
When it comes to cloud companies, the first thing that usually comes to mind would typically be Amazon (AMZN Stock Report) or Salesforce.com (CRM Stock Report). Amazon Web Services dominates the cloud industry. You could say it is one of the few that reported consistent profits in the cloud computing market. Whereas salesforce.com is the market leader in cloud-based customer relationship management space, a niche in the cloud computing space. It also generates consistent profits and posted a record-high operating margin from its last quarter.
But the companies above are stalwarts in the business. If you are looking for explosive growth, you might be better off looking at smaller cloud computing companies. While many of these smaller companies aren’t really profitable yet, the good thing is, investors don’t seem to care much. What’s important appears to be revenue growth. Thus, investors will continue to stick with them in hopes that economies of scale will gradually kick in and start bringing profits. In light of the potential of the cloud computing industry, would you consider having this list of top cloud computing stocks to buy on your watch list?
Top Cloud Computing Stocks To Watch: DocuSign
DocuSign (DOCU Stock Report) has been one of the biggest beneficiaries of the coronavirus pandemic. The need for social distancing has made it impossible for businesses to sign contracts in person. Given how critical signed documents are, the importance of using a trusted provider like DocuSign couldn’t be more pronounced.
As a pioneer in the e-signature market, many analysts are expecting “very healthy renewal rates” for DocuSign. That is because some customers are unlikely to go back to manual processes after having a taste of the company’s electronic-signature solutions. For those who have been following our feeds closely, you would know that we began discussing DocuSign in June. Since then, DOCU stock has climbed at least 60%. The company is slated to report its upcoming quarterly results on December 3.
During the quarter ended July 2020, DocuSign saw revenues of $342.21 million, an increase of 45% year-over-year. Billings were $405.7 million, an increase of 61% year-over-year. Non-GAAP earnings per share were $0.17, a jump from $0.01 a year ago. Its increasing profitability is not too shabby for a cloud software company. As the last reported quarter was for the 3 months ending July 2020, the full impact of the pandemic has yet to be seen. DOCU stock has taken a breather along with the broader tech sell-off we saw in September. With that in mind, could the current valuation be enticing enough for you to add DOCU stock to your watchlist?
Top Cloud Computing Stocks To Watch: Fastly
Fastly’s (FSLY Stock Report) stock had been a bit of a downward spiral since announcing preliminary Q3 2020 results last month. No doubt, the shares of the edge-cloud computing company have been on a tear prior to that. With the massive surge in web traffic during the pandemic coupled with the hype of TikTok, you can’t blame the disappointment among investors when the company announced that it had lost TikTok as its customer. With a high-flying stock like Fastly, investors’ expectations were through the roof.
Despite the shares having rebounded above the $70 mark, it is still not enough to soothe the battered egos of those who bought FSLY before it released preliminary earnings a few weeks back. But that’s a part of life, isn’t it? Sometimes you take chances that eventually play out in your favor. And sometimes they don’t.
Despite what appears to be negative sentiments, Fastly recorded top-line growth with revenue of $71 million, up 42% year-over-year. What’s more, GAAP gross margin grew to 58.5%, up from 55.2% a year ago. In the third quarter, the company saw its highest quarterly new booking attainment this year. That bodes well for the company’s future growth and ability to serve its customers. Fastly also completed the acquisition of web application security company Signal Sciences during the quarter. With steady growth and a broader range of product offerings. Should you buy FSLY stock on the cheap?
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Top Cloud Computing Stocks To Watch: Cloudflare
Cloudflare (NET Stock Report) will be one top cloud computing stock to watch today. The company saw its stock price surge around 12.07% during pre-market trading as of 7.11 a.m. ET. This comes as the company handily beat third-quarter estimates on Thursday while revenue guidance came in above Wall Street targets. The company reported a loss of 2 cents per adjusted share, narrowing its loss from the year-earlier period. Meanwhile, revenue jumped 54% to $114.2 million.
“All sudden everyone’s at home, and so people are connecting and doing work online from new places,” Zatlyn said. “What you’re seeing along with that is a large increase in the number of cyberattacks, which is sad, but it’s true: They’re using the fact that employees are working at home, not on their corporate networks, as a weak link to go and attack.”
The silver lining is that cybersecurity technology is now better and cheaper than before. And Cloudflare is poised to benefit immensely as its services would help many corporations to fend off various forms of cyber attacks. With so much growth prospects centering around Cloudflare, is NET stock the best cloud stock to buy?
