In this article, we will be taking a look at the 16 best cloud computing stocks to buy now. To skip our detailed analysis of the cloud computing industry, you can go directly to see the 5 Best Cloud Computing Stocks To Buy Now.
Throughout 2023, the information technology sector consistently surpassed both investor and analyst expectations. Innovations like artificial intelligence (AI) and generative AI emerged as key drivers of the tech rally, propelling stock prices for tech companies to unprecedented levels. While AI certainly commands attention in the current year, it's not the only tech frontier worth investors' focus. Cloud computing stands out as another compelling area for development and investment. With individuals, corporations, and governments globally transitioning towards a more digital landscape, the potential of cloud computing is increasingly promising.
Cloud computing experienced significant growth during the 2010s, but the expansion of this next-generation IT industry is still in its early stages. Over the years, organizations worldwide have been transitioning their operations to the cloud, storing digital data and services in remote data centers and accessing them via the Internet. However, the surge in remote work during the pandemic hastened this trend. Now, the emergence of generative AI is driving the next wave of cloud expansion. According to tech researcher Gartner, global spending on cloud computing, which includes data center infrastructure and edge computing, was projected to surge to $600 billion in 2023, with an estimated rise to $725 billion in 2024.
We used Insider Monkey's hedge fund data from the fourth quarter of 2024 to find the best cloud computing stocks that were popular among hedge funds in that quarter. We then shortlisted and ranked these stocks based on the number of hedge funds holding stakes in them, from the lowest to the highest number. Over the past decade, the top 10 consensus stock picks of hedge funds have outperformed the S&P 500 Index by more than 140 percentage points (see the details here). This is a significant outperformance, and it underscores the importance of closely monitoring this frequently overlooked indicator.
Number of Hedge Fund Holders: 41
The Trade Desk, Inc. (NASDAQ:TTD) is a multinational technology company headquartered in the United States, specializing in real-time programmatic marketing automation technologies, products, and services. The company prioritizes delivering personalized digital content while advocating for Unified ID 2.0 (UID2), a protocol aimed at balancing relevant advertising with user privacy.
Following robust first-quarter guidance and a revenue beat, shares of The Trade Desk, Inc. (NASDAQ:TTD) surged over 18%. The company reported a 23% increase in fourth-quarter sales, rising from $491 million to $97 million year-over-year. Additionally, net income saw a 37% rise, reaching $97 million compared to $71 million in the corresponding quarter the previous year.
During the December quarter of the previous year, 41 out of the 933 hedge funds profiled by Insider Monkey held shares of the firm. The Trade Desk, Inc. (NASDAQ:TTD)’s largest investor is Israel Englander’s Millennium Management, which owns 3.32 million shares valued at $239 million.
Like Oracle Corporation (NASDAQ:ORCL), ServiceNow, Inc. (NYSE:NOW), and Snowflake Inc. (NYSE:SNOW), The Trade Desk, Inc. (NASDAQ:TTD) is one of the best cloud computing stock many hedge funds are eyeing today.
Number of Hedge Fund Holders: 47
Twilio Inc., headquartered in San Francisco, California, is a U.S.-based corporation providing programmable cloud communication solutions. Their services enable users to make and receive phone calls, send and receive text messages, and execute diverse communication tasks via their web service APIs.
On January 8, Twilio Inc. (NYSE:TWLO) announced the appointment of a new CEO and shared upbeat forecasts for the upcoming quarter. The company expects that the fourth-quarter guidance, initially outlined on November 8, will exceed expectations. Twilio Inc. (NYSE:TWLO) anticipates adjusted earnings ranging from 53 to 57 cents per share, along with a revenue outlook of $1.03 billion to $1.04 billion.
As of December 2023 end, 47 out of the 933 hedge funds part of Insider Monkey’s database had invested in Twilio Inc. (NYSE:TWLO). David Blood and Al Gore’s Generation Investment Management was the biggest investor, owning 8.5 million shares that are worth $645 million.
Number of Hedge Fund Holders: 48
Veeva Systems Inc. (NYSE:VEEV) specializes in healthcare software services, aiding organizations in managing customer engagement, drug development, and diverse business operations. In September 2023, the company expanded its software portfolio with the introduction of a new cloud platform tailored to help pharmaceutical manufacturers oversee their production and supply chains.
Veeva Systems Inc. (NYSE:VEEV) released its earnings results most recently on December 6. The technology firm posted earnings of $1.34 per share for the quarter, surpassing analysts' consensus forecasts of $1.29 by $0.05. Veeva Systems Inc. (NYSE:VEEV) achieved a return on equity of 10.91% and a net margin of 24.68%. During the quarter, the company generated $616.51 million in revenue, slightly exceeding analyst expectations of $615.98 million.
48 out of the 933 hedge funds part of Insider Monkey’s Q3 2023 database are Veeva Systems Inc. (NYSE:VEEV)’s shareholders. These held a collective stake worth $1.47 billion.
Number of Hedge Fund Holders: 50
The International Business Machines Corporation (NYSE:IBM), commonly known as "Big Blue," is a prominent American multinational technology company with its headquarters in Armonk, New York. It offers a variety of solutions, including database management, machine learning, and developer tools. The company's IBM Cloud serves a wide range of cloud computing needs, offering extensive resources to support businesses in their digital operations. As of February 26, the stock has a dividend yield of 3.61% and it pays a quarterly dividend of $1.66 per share. The company’s dividend growth streak currently spans over 28 consecutive years.
According to Insider Monkey’s database of Q4 2023, 50 hedge funds owned stakes in International Business Machines Corporation (NYSE:IBM), slightly declining from 53 in the preceding quarter. The total value of these stakes is roughly $1.91 billion.
Number of Hedge Fund Holders: 60
Cisco Systems, Inc. (NASDAQ:CSCO) is a multinational corporation focused on designing, manufacturing, and distributing networking and communication products globally. Its diverse product portfolio encompasses switches, routers, wireless devices, and computing solutions.
Cisco Systems, Inc. (NASDAQ:CSCO) announced a quarterly dividend of $0.40 per share on February 14, marking a 2.6% increase from its previous dividend of $0.39 per share. This dividend is slated for payment on April 24 to shareholders recorded as of April 4.
As per Insider Monkey's fourth-quarter database, 60 hedge funds showed bullish sentiments towards Cisco Systems, Inc. (NASDAQ:CSCO), down from 64 funds in the previous quarter. AQR Capital Management, led by Cliff Asness, holds the largest stake in the company, possessing 12 million shares valued at approximately $615 million.
Number of Hedge Fund Holders: 75
Intuit Inc. (NASDAQ:INTU) is a U.S.-based business software company specializing in financial software. It offers a variety of financial management and compliance products and services tailored to consumers, small businesses, self-employed individuals, and accounting professionals in the United States, Canada, and internationally. Intuit Inc. (NASDAQ:INTU) operates through four distinct segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax.
In December 2023, 86 out of the 933 hedge funds surveyed by Insider Monkey held a stake in the firm. Intuit Inc. (NASDAQ:INTU)’s largest hedge fund investor is Ken Fisher’s Fisher Asset Management, with a $1.9 billion stake.
Number of Hedge Fund Holders: 81
Workday Inc. (NASDAQ:WDAY) specializes in developing enterprise cloud applications tailored for finance and human resources. Its suite of applications encompasses solutions for financial management, human capital management, and analytics, catering to a diverse array of organizations, including companies, educational institutions, and government agencies.
In the December quarter of the previous year, Insider Monkey's analysis of 933 hedge funds revealed that 81 held shares of Workday, Inc. (NASDAQ:WDAY). The largest investor in Workday, Inc. (NASDAQ:WDAY) is Andreas Halvorsen’s Viking Global, possessing 4.1 million shares valued at $1.1 billion.
Polen Global Growth Strategy stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its fourth quarter 2023 investor letter:
“Workday, Inc.’s (NASDAQ:WDAY) stock price was weak coming into the quarter. At the company’s investor day in late September, management provided medium-term annual revenue guidance of 17-19%. Many investors were likely expecting annual revenue guidance of 20%+, so the 17- 19% guidance may have been viewed as a tad disappointing. Following the investor day, Workday’s stock price rose significantly during Q4, buoyed by the company’s fiscal Q3 2024 earnings report, which was better than anticipated and included management raising revenue guidance for their fiscal 2024. We view the long-term guidance provided at the investor day as likely to be conservative, with ample room for Workday to continue taking share in the $100bn+ global HCM (human capital management) market. We remain confident in Workday’s ability to generate 20%+ annualized earnings growth over the next three to five years.”
Number of Hedge Fund Holders: 86
Snowflake Inc. (NYSE:SNOW) is a cloud computing-focused data cloud company renowned for its cloud-based data storage and analytics service, often dubbed "data-as-a-service" (DaaS). Founded in July 2012 and publicly launched in October 2014, Snowflake's platform empowers organizations to store and analyze their data in the cloud. It offers a range of features including data warehousing, data lakes, and data sharing capabilities.
During 2023’s fourth quarter, 86 out of the 933 hedge funds part of Insider Monkey’s database had bought a stake in the firm. The largest Snowflake Inc. (NYSE:SNOW) shareholder out of these is Brad Gerstner’s Altimeter Capital Management as it owns $2.4 billion worth of shares.
Number of Hedge Fund Holders: 91
Headquartered in Santa Clara, California, ServiceNow, Inc. (NYSE:NOW) is a prominent American software company specializing in cloud computing platforms aimed at optimizing digital workflows for enterprise operations. Its primary focus areas include IT service management, IT operations management, and IT business management.
On January 26, Tyler Radke at Citigroup maintained a Buy rating and set an optimistic $896 price target for ServiceNow, Inc. (NYSE:NOW).
According to Insider Monkey's analysis of 933 hedge fund portfolios as of the end of December 2023, 91 funds held shares of ServiceNow, Inc. (NYSE:NOW). Ken Fisher’s Fisher Asset Management emerged as the largest shareholder of the company for the quarter.
Number of Hedge Fund Holders: 100
Oracle Corporation (NYSE:ORCL), a renowned technology giant, is celebrated for its software products and services, notably Java. The company operates across four primary business segments: cloud and license, hardware, services, and database management systems. In January 2024, the company continued its A.I. advancements by announcing the integration of models from Meta and Cohere into its products.
Insider Monkey’s database of 933 hedge funds shows that 100 hedge funds had stakes in Oracle Corp (NYSE:ORCL) as of the end of the fourth quarter of 2023, up from 88 funds in the previous quarter.
Madison Sustainable Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its fourth quarter 2023 investor letter:
“Oracle Corporation (NYSE:ORCL) reported a disappointing second quarter due to supply constraints. Cloud revenue was below expectations as Oracle made planning decisions to accommodate some large-scale Oracle Cloud Infrastructure (OCI) clients that take longer to bring online. We continue to believe that Oracle has a unique position in Generative AI workloads and continue to like its position and strategy.”
Number of Hedge Fund Holders: 105
Headquartered in California, Adobe Inc. (NASDAQ:ADBE) stands as a versatile software company offering an extensive array of products and solutions empowering individuals, teams, and enterprises to create, publish, and promote content. Renowned as a top choice among content creators, students, professionals, and consumers alike, Adobe Inc. (NASDAQ:ADBE) also operates a Digital Experience segment, catering to brands and businesses in managing, implementing, and monetizing customer experiences. In addition, it offers the Document Cloud, a unified cloud-based document services platform, among more.
On December 13, Adobe Inc. (NASDAQ:ADBE) reported a Q4 non-GAAP EPS of $4.27 and revenue of $5.05 billion, surpassing Wall Street estimates by $0.13 and $30 million, respectively. This robust performance underscores Adobe’s continued strength in the market. Additionally, the company exhibited confidence in its future by repurchasing approximately 1.8 million shares during the quarter.
Insider Monkey sifted through 933 hedge fund holdings for last year’s December quarter and found 105 Adobe Inc. (NASDAQ:ADBE) shareholders. Ken Fisher’s Fisher Asset Management emerged as the largest investor, holding a stake valued at $2.7 billion.
Like Oracle Corporation (NASDAQ:ORCL), ServiceNow, Inc. (NYSE:NOW), and Snowflake Inc. (NYSE:SNOW), Adobe Inc. (NASDAQ:ADBE) is one of the best cloud computing stock to invest in.
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Disclosure: None. 16 Best Cloud Computing Stocks To Buy Now is originally published on Insider Monkey.
