As digital transformation accelerates across various industries, cloud computing is at the forefront of the digital revolution. Its flexible resources and enhanced innovation are driving businesses to embrace this technology. Plus, with the rise of remote work, cloud computing continues to lead and shows no signs of slowing down.
Amid this backdrop, let us dive deep into the fundamentals of robust cloud computing stocks, Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), and Salesforce, Inc. (CRM), that are leading the forefront of the digital revolution.
Over the past few years, remote work has become the preferred method of employment for millions. According to the Pew Research Center, around 22 million employed adults in the United States work from home full-time, equal to roughly 14% of all employed adults.
Remote work trends and modernization in technology have boosted the rate of adoption of cloud computing in various sectors, with more than 90% of organizations now using cloud services to improve efficiency and innovation.
With reduced cost, improved scalability, several security measures, and high performance and speed, the influence of cloud computing in modern-day businesses is unmatched. According to Fortune Business Highlights, the cloud computing market is projected to reach $2.29 trillion by 2032, growing at an impressive CAGR of 16.5%.
Now let us look into the fundamentals of three cloud computing stocks that are leading the digital revolution, starting with #3.
Stock #3: Alphabet Inc. (GOOGL)
GOOGL encompasses a range of companies, with Google as its central entity, serving billions of users globally. Its widely used platforms are Search, Ads, Chrome, Cloud, YouTube, and Android. The company anchors its operations across three main segments: Google Services; Google Cloud; and Other Bets.
On May 2, GOOGL announced a collaboration with MongoDB, Inc. (MDB), an industry-leading developer data platform, to optimize Gemini Code Assist and provide enhanced suggestions for application development and modernization on MDB.
The collaboration is expected to strength GOOGL's position in delivering cutting-edge, developer-focused solutions and supporting ongoing innovation in cloud technology.
For the fiscal 2024 third quarter that ended September 30, GOOGL’s revenues increased 15.1% year-over-year to $88.27 billion. Its income from operations rose 33.6% from the year-ago value to $28.52 billion.
Plus, the company’s net income came in at $26.30 billion, up 33.6% year-over-year. Its earnings per share grew 36.8% from the prior year’s quarter to $2.12.
Analysts expect GOOGL’s revenue for the fiscal fourth quarter (ending December 2024) to increase 10.9% year-over-year to $95.70 billion. Its EPS is expected to grow 24.4% from the prior year’s period to $2.04. Moreover, the company topped the revenue and EPS estimates in all four trailing quarters, which is impressive.
Shares of GOOGL have surged 10.5% over the past nine months and 38.9% over the past year to close the last trading session at $169.68.
GOOGL’s POWR Ratings reflect its positive fundamentals. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
GOOGL has a B grade for Sentiment, Stability, and Quality. Within the B-rated Internet industry, GOOGL is ranked #9 out of 53 stocks.
To check the stock’s ratings for Growth, Momentum, and Value, click here.
Stock #2: Amazon.com, Inc. (AMZN)
AMZN engages in retail, advertising, and subscription services through both online and physical channels. Its segments include North America; International; and Amazon Web Services (AWS). The company also provides electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero, along with original media content.
On October 29, AWS announced a collaboration with CelcomDigi, Malaysia’s largest mobile operator, with AWS as its key cloud provider to transform the company into an artificial intelligence (AI)-powered organization.
The collaboration could benefit AMZN by strengthening AWS’s foothold in the Asian telecommunications market and showcasing its cloud and AI capabilities on a large scale.
On October 24, AWS announced a strategic partnership with Box, Inc. (BOX), a leading intelligent content management platform, to build new applications and maximize productivity with generative AI.
The collaboration would enhance AWS’s growth potential, driving global adoption of GenAI solutions across industries and reinforcing its leadership in AI-driven innovation.
For the fiscal 2024 second quarter, which ended on June 30, AMZN’s total net sales increased 10.1% year-over-year to $147.98 billion. Its operating income rose 91% from the year-ago value to $14.67 billion.
Additionally, the company’s net income amounted to $13.48 billion, representing a year-over-year increase of 99.8%. Moreover, its EPS grew 93.8% from the previous year’s quarter to $1.26.
Street expects AMZN’s revenue and EPS for the fiscal third quarter that ended September 2024 to increase 9.9% and 21.5% year-over-year to $157.28 billion and $1.14, respectively. Moreover, the company topped the consensus EPS estimates in each of the trailing four quarters, which is impressive.
Shares of AMZN have surged 18.3% over the past nine months and 49.4% over the past year to close the last trading session at $190.83.
AMZN’s solid prospects are projected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
AMZN has a B grade for Sentiment and Quality. It is ranked #15 out of 53 stocks within the same industry.
Click here to see AMZN’s ratings for Growth, Momentum, Value, and Stability.
Stock #1: Salesforce, Inc. (CRM)
CRM provides Customer Relationship Management solutions, connecting companies with customers by organizing sales data, tracking leads, forecasting opportunities, and applying AI-driven analytics. Its platform also supports automated quotes, contracts, invoices, and enables personalized customer support at scale.
On October 29, CRM announced the launch and general availability of Agentforce, a service on the Salesforce platform that works through building and deploying AI agents for companies to take action for any business function.
With the launch of new services like Agentforce in the prime years of AI development, CRM is making its way into one of the top players in the AI boom and ensuring stable growth prospects for the company.
On September 17, CRM announced a strategic collaboration with NVIDIA Corporation (NVDA) to deliver optimized predictive and generative AI workflows by bringing together the NVIDIA AI platform with the Salesforce Platform and Agentforce.
The collaboration brings in new avenues for CRM to develop and supercharge its AI performance and provide more engaging, intelligent, and immersive experience to its customers.
CRM’s total revenue for the fiscal 2025 second quarter, which ended July 31, 2024, increased 8.4% year-over-year to $9.33 billion. Its non-GAAP income from operations rose 15.5% from the year-ago value to $3.14 billion.
In addition, the company’s non-GAAP net income and non-GAAP net income per share increased 19.1% and 20.8% from the prior year’s period to $2.50 million and $2.56, respectively.
The consensus revenue and EPS estimates of $9.35 billion and $2.45 for the fiscal 2025 third quarter ending October 2024 reflect a rise of 7.2% and 15.9% year-over-year, respectively. Furthermore, the company surpassed the consensus EPS estimates in each of the trailing four quarters.
CRM’s stock has surged 15.6% over the past three months and 52.1% over the past year to close the last trading session at $298.89.
CRM’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has a B grade for Sentiment and Quality. It is ranked #17 out of 130 stocks in the Software – Application industry.
Click here to check out CRM’s ratings for Growth, Value, Momentum, and Stability.
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GOOGL shares rose $11.27 (+6.64%) in premarket trading Wednesday. Year-to-date, GOOGL has gained 21.77%, versus a 23.55% rise in the benchmark S&P 500 index during the same period.
About the Author: Aanchal Sugandh
Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.
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