The company has an impressive surprise history; it surpassed the consensus revenue and EPS estimates in each of the trailing four quarters. The stock has an A grade for Growth and Quality and a B for Sentiment. NTNX is ranked #10 out of 127 stocks in the Software – Application industry. Street expects NTNX’s revenue to increase 13.5% year-over-year to $641.76 million for the second quarter ending January 2025.
- Zacks Rank #2 Tyler Technologies is benefiting from higher recurring revenues and the rebound of market and sales activities to pre-pandemic levels.
- Magnifi Communities LLC and its affiliates may hold a position in any of the companies mentioned.
- The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
- With The Trade Desk, Green has developed a platform that not only helps agencies book ad dollars but justify their spending to clients.
- Based on a report by MarketsandMarkets, the global cloud industry in 2025 is projected to grow by 15.1% to $1,256.8 billion.
- More importantly, the business has seen a profitability inflection point, with its segment operating income soaring from $266 million a year ago to $1.95 billion last quarter.
Investors Remain “Cautiously Optimistic”
Cloudflare (NET -3.78%) is the world’s largest CDN (content delivery network) provider in terms of total customers. Its CDN platform accelerates the delivery of images, videos, and other content for websites, while its DNS (domain name server) service connects website addresses to the correct IP addresses. While Applied Digital currently has a Buy rating among analysts, top-rated analysts believe these five stocks are better buys. Cloud ETFs have generated generous returns of 2.74%, 28.54% and 11.00% for 1-month, 6-month and 1-year tenors. One would assume that the underlying stocks would continue to perform well, propelled by strong industrial tailwinds.
Final Thoughts: Cloud Computing Stocks
On this front, there are several valuation metrics that can be relied upon. Standard models such as the discounted cash flow (DCF) often do not capture the potential of cloud computing stocks since there are few reasonable estimates to measure their growth. These stocks differ from traditional companies since they don’t have to fork out massive capital to buy equipment and prime themselves for growth. Instead, software development is a margin heavy business with low development costs and stable, recurring revenue. This makes management focus on growing market share, and since this also leads to higher operating costs, many cloud computing stocks remain unprofitable for years. The direct implication of this fact on valuation is that cloud computing stocks cannot be valued by traditional metrics such as the price to earnings (P/E) ratio.
At Fastly’s core is Varnish, an open-source web application accelerator that tracks the location of users, then makes certain they’re connected to the nearest server with the data they need. This makes it especially valuable for companies hosting streams or video conferences. Deutsche Bank’s Taylor McGinnis (Buy) believes the company can continue to expand its sales at more than 30% each year. Even if workers return to offices, the convenience of e-documents should keep growth high. The company was founded in 2003 and spent its earliest years primarily serving the real estate industry. In addition to taking signatures, its technology maintains a record of where documents have gone and what was done with them.
JNPR is benefiting from strong growth in the Enterprise vertical, backed by healthy demand for AI-driven Enterprise, hardware maintenance and professional services. Investors should buy cloud stocks that belong to leaders in the industry, with some diversification into small but promising players, and companies that hold high barriers to entry. The company’s partnership with leading AI foundational model company OpenAI has helped set it apart.
It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium. A close up view of a laptop computer, the cloud computing platform displayed on the screen. Zscaler (ZS, $124.87), like Crowdstrike, offers computer security Cloud stocks in the cloud. And the stock has been a winner, with nearly 170% gains so far in 2020. Telemedicine has been taking off during the pandemic, and Shipchandler believes this business will remain after the pandemic is over. Success for an ad platform involves getting new partners whose ads it can sell.
In the battle of cloud infrastructure firms, investors may have more success with another company, although the price drop has given the company a relatively attractive P/S ratio of 1.6. The company has struggled with cash flow, which declined YOY on both an annual and a quarterly basis as reported in February. On the other hand, analysts may be optimistic about Couchbase’s recently launched Edge server, designed to be used offline for low-latency data access and processing. Couchbase’s fiscal 2025, which ended Jan. 31 of this year, saw a fairly solid 16% YOY revenue improvement.
With 25% to 30% of workers doing at least some work from home in 2021, against 2.6% before the virus, Greene said Crowdstrike can now sell company-wide deployments and upsell profitable consulting services. Crowdstrike’s approach has put CRWD on several analysts’ lists of cloud stocks to buy. Cloud computing – and thus investing in cloud stocks – is becoming more sophisticated by the year. Most IT innovations are developed for and funded by large organizations. Yet small businesses still make up about half of the global economy’s production. Most are far behind the curve in making needed digital transformation.
List of Mountain Bike Stocks 2025
Digital ads will continue to be a fast-growing industry in the next decade — especially in at-home entertainment as TV and movies move to an on-demand internet streaming format. Zoom is eyeing a bigger piece of the massive global telecom industry by going after large business communications accounts. Zoom Phone accounts, a service for transferring calls across different devices, has steadily grown for years. Zoom’s contact center services to manage inbound calls and customer contact have also remained a key growth initiative. The cloud increases a company’s flexibility, often unlocks cost savings, and helps them get more done with the data they have on their operations and customers. However, with the adoption of the cloud comes an explosion of digital data and new security risk considerations.
- Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
- Zoom is poised to continue as a basic necessity of corporate communications services for a long time.
- The brokerage target price is currently in the range of $101 to $130.
- Among the top cloud stocks that trade on the stock exchanges, we have aggregated a list of the best cloud stocks for you.
- Salesforce.com (CRM -1.46%) is still the 800-pound gorilla of the CRM market, but its platform includes a lot of enterprise features that smaller businesses don’t need.
Google (NASDAQ: GOOGL)
Cloud computing boomed during the 2010s, but growth in this next-gen IT industry is still in the early innings. For years, organizations around the globe have been migrating their operations to the cloud — digital data and services stored within a remote data center and accessed via the internet. However, the rise of remote work during the pandemic accelerated the trend. The U.S. cloud computing market is projected to grow at a CAGR of 20.3% from 2024 to 2030.
As is the case with all high-growth stocks, though, investing in cloud companies will have bumps in the road. Investors should stay focused on the long-term potential, not just stock price performance over the course of a year or two. This long-term secular growth trend is poised to remain intact for the next decade and beyond. The company registered a 23% y-o-y growth in Q3 earnings but it incurred an operating loss amidst shrinking margins and escalating marketing and R&D expenses.
Fidelity Investments vs. Vanguard
Further, new technological developments and expansion into burgeoning markets mean that there is space for some of these companies to capture additional market share. Tyler Technologies has an expected revenue and earnings growth rate of 8.9% and 15.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% in the last 30 days. Juniper Networks has an expected revenue and earnings growth rate of 7.3% and 21.5%, respectively, for the current year.
This integration will enable TWLO to build conversational AI applications and agents, which will bring customers more natural interactions to the platform. NTNX’s total revenue for the first quarter, which ended October 31, 2024, was $511.05 million. Its non-GAAP net income came in at $121.77 million and $0.42 per share. The average short-term price target of brokerage firms represents an increase of 26% from the last closing price of $84.76. OKTA’s Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data, while API Access Management enables organizations to secure APIs.
While this move carries some risk, diversifying its AI portfolio and forging its own AI path should be a big opportunity. A team of technicians working on a server of bitcoin mining equipment in a data center. Our content is packed with the essential knowledge that’s needed to help you to become a successful trader. We have members that come from all walks of life and from all over the world.
A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations.
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