For the fiscal year, Microsoft recorded sales of $ 44.28 billion in sales of $ 143 billion, an increase of 13% and 14%, respectively, from the record performance of the previous year. In particular, in 2020, Microsoft thrived despite the coronavirus pandemic as its Smart Cloud segment, including Azure, has seen an increase in demand as companies adjust to the new normal with employees working from home. .
For example, in the fiscal fourth quarter, Microsoft’s Intelligent Cloud division raised $ 13.4 billion compared to analyst estimates of $ 13.11 billion. Sales also grew 17% year-over-year. Microsoft Chief Financial Officer Amy Hood said, “Our business cloud exceeded $ 50 billion in annual revenue for the first time this year. And this quarter our commercial reserves were better than expected, growing 12% year-over-year. “
Additionally, Microsoft’s Productivity and Business Solutions division, which mostly comprises cloud software assets, including Teams, posted revenue of $ 11.8 billion, 6% more than the previous year’s levels. Equipment use, by the way, shot up to 75 million in June from 44 million in March.
Microsoft’s shares have now risen more than 34% this year, pushing the tech giant’s market capitalization beyond $ 1.6 trillion. Meanwhile, the broader S&P 500 gained a meager 1.4% year-to-date. Without a doubt, Microsoft’s record-breaking fiscal year of growing demand for cloud services has been an opportunity for other cloud players. But it is not the pandemic that is responsible for driving the adoption of cloud computing. Before the pandemic accelerated the trend, research firm Gartner had estimated that the cloud computing market will grow 17% this year to reach $ 266 billion.
So let’s take a closer look at some of the notable cloud computing stocks like Microsoft that not only benefited from this growing technology issue, but are also poised to continue to win in the near term:
Amazon
Amazon.com, Inc.’s cloud-based AMZN approach could have saved it from a coronavirus collapse in the quarter ending June 2020. Amazon is undoubtedly the center of attention, as it is currently a major player in the cloud infrastructure market.
The Seattle-based company has a strong Internet presence through Amazon Web Services (“AWS”). And some of the big names, like General Motors, Baidu, Spotify, McDonald’s, Twitter, and Johnson & Johnson, use AWS.
AWS has more than 30% market share in cloud infrastructure and easily overshadows rivals such as Azure (17% share) and Google Cloud (6% share). Plus, with more people working from home, AWS cloud services usage will increase.
Alibaba
Alibaba Group Holding Limited’s BABA cloud business unit, with the help of AI-driven technologies, provides data on coronaviruses and their diagnosis. Applications developed by the company’s cloud experts and researchers from its subsidiary DAMO Academy are expected to provide the necessary support to medical professionals around the world to combat the spread of the virus.
Incidentally, the rise in video consumption and the wide adoption of remote work amid the pandemic are driving Alibaba’s cloud business unit. In the cloud, CEO Daniel Zhang said, “We believe the pandemic will further accelerate the digital transformation of companies. All industries, including the public sectors, will choose to move their technology infrastructure to the cloud. “
The company’s expected profit growth rate for the current year is 14.7%. Alibaba is ranked # 3 by Zacks.
NVIDIA
NVIDIA Corporation NVDA is primarily known for supplying graphics processing units (GPUs) to cloud providers. Lately, NVIDIA released the A100 GPU which will be implemented by Alibaba Cloud, AWS and Microsoft Azure. It will be useful for handling large workloads as well as AI applications.
Therefore, NVIDIA is undoubtedly in an excellent position to benefit from the growth of cloud computing. Graphics processor company co-founder Jensen Huang added, “I think accelerated cloud computing is a movement that is going to be a transition of several years, if not a decade.”
The company’s expected profit growth rate for the current year is 36.4%. NVIDIA has a # 3 Zacks rank.
Zuora
Zuora, Inc. ZUO provides subscription-based cloud-based software that enables companies in various industries to launch, manage, and transform into a subscription business.
Cloud-based software or software-as-a-service (SaaS) companies enjoy high margins as the costs associated with delivering a cloud-hosted software service are relatively lower. Generally speaking, SaaS stocks are short-term winners with high margins and constant revenue streams.
Research firm Gartner, in fact, expects SaaS to be one of the fastest growing market segments in the short term, and revenue is expected to grow exponentially until 2022. Take a look at the table:
However, the company’s expected earnings growth rate for the current quarter is 22.2%. Zuora has a rank of Zacks n. ° 2 (Buy).
The most popular technological megatrend of all
Last year, it generated $ 24 billion in global revenue. By 2020, it is projected to explode through the ceiling at $ 77.6 billion. Famous investor Mark Cuban says it will produce “” the world’s first billionaires “”, but that should still leave a lot of money for regular investors doing the right trades early.
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