Cloud Computing Stocks for a Growing Market

April 6, 2020
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In the last decade, cloud computing has emerged as one of the most exciting areas of technology investment. Being decentralized, scalable, efficient, and affordable; the cloud appeals to businesses of all sizes.

These are the stocks that are most likely to see an upside from the current conditions.

Amazon.com (NASDAQ: AMZN)

Amazon is the world’s largest cloud services provider by customer volume and revenue. This stock is a double-play because it also offers exposure to the eCommerce market. Amazon is an essential retailer during COVID-19 lockdowns, as many families turn to online shopping for essentials.

Amazon’s business-focused cloud services are especially important today as companies of all sizes scramble to deploy applications to their remote workforces.

There’s a strong upside predicted on this stock with an average target price of $2,422.

Microsoft (NASDAQ: MSFT)

Technology giant Microsoft has a rapidly growing cloud computing business, and its strong relationships with SMEs and large enterprises are helping it to quickly catch up to Amazon in total volume. Microsoft is also the benefactor of large government contracts, including a pending cloud deployment contract signed with the U.S. Department of Defense.

The company’s cloud platform also appeals to individual users. The Microsoft Office 365 suite is a popular option for professionals who telecommute. Microsoft announced last week that it has seen a 775% increase in demand for its cloud services since the Coronavirus outbreak.

The stock offers growth potential with an average target price of $190.20. There’s also a stable dividend with a yield of 1.33% today.

International Business Machines (NYSE: IBM)

IBM recently underwent a radical internal shift to focus on cloud services. That decision will prove to be fruitful in the coming years. The company has the advantage of cloud-native applications and services and complete control over its infrastructure. This makes it possible to compete with Microsoft and Amazon, two companies that are much more experienced in the cloud with sizeable resources.

IBM is affordable today, with its price down -25% when tracking data over the previous year. With an average target price of $139.82, there’s a strong likelihood of an upside for patient investors. The high 6.09% dividend yield also makes this a strong pick for the current market conditions.

The markets could fall before they trend in the other direction. However, these three cloud stocks are strong bets for the long-term, considering both the current situation and the gradual shift to the cloud that has been witnessed in recent years.

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