4 Cloud Stocks to Succeed in the Coronavirus Pandemic
Industries continue to be in turmoil, with markets crashing in the midst of a pandemic that has killed more than 900,000 people across the globe. President Trump warned of a “very, very painful “two weeks ahead for the United States due to the fast spread of COVID-19, which emerged in Wuhan, China, and now has brought economic growth to a standstill.
The stock exchange opened in the second quarter the same way that it ended in March, with massive losses. The already battered stock exchanges saw a quarter of their worst start ever. But there are still some bright spots in the markets.
With that said, it’s the technology industry that can handle this gloomy scenario. Most specifically, tech stocks involved in cloud computing are expected to benefit the most as coronavirus increases the number of people working or studying from home, while social distancing steps are enforced to reduce the spread of COVID-19.
Since most people are now working or studying remotely, most businesses need to transfer a significant part of their workload to the cloud. To top it off, customers began to shop online because of the lockdown. Thus, in order to grow during this dark times, every consumer-oriented company needs to have a digital presence built on the cloud.
Daniel Ives of Wedbush added that almost $1 trillion would be spent on cloud over the next decade, which will definitely help major cloud players. So let’s look at some of the top cloud stocks that can make the most of coronavirus time.
Amazon – A Dominant Cloud Infrastructure Player
Amazon.com, Inc. AMZN is certainly in the spotlight as it is currently one of the biggest players in the cloud infrastructure market. The Seattle-based company has a solid presence throughout the Internet via Amazon Web Services (“AWS”). And some of big names, including General Motors, Baidu, Spotify, McDonald’s, Twitter and Johnson & Johnson, use AWS.
AWS has over a 30% market share in cloud infrastructure and easily dwarfs rival Azure (17% share) and Google Cloud (6% share). What’s more, social distancing and more people working from home will increase the usage of AWS cloud services.
Amazon, in itself, is benefiting from its Prime program, delivery and logistic system in the e-commerce space. The Zacks Consensus Estimate for its current-year earnings has increased 4.3% over the past 90 days. The company’s expected earnings growth rate for the current quarter and year is 17.2% and 19.2%, respectively. Shares of Amazon have outperformed the Internet – Commerce industry so far this year (+3.3% vs -3.1%).
Source: Yahoo News
Microsoft Reports Spike in Use of Teams Product
Microsoft Corporation MSFT recently won a $10-billion cloud computing contract from the Pentagon. Such a contract helped it build one of the strongest cloud infrastructure businesses in America. And now the cloud computing business has accelerated given the coronavirus outbreak.
After all, cloud-host enterprise works solutions like Microsoft Teams product has added more than 44 million daily users around the world amid the outbreak, which is more than double of 20 million users that the company had added last November. In fact, in Italy, the number of Teams users soared 775% in just a month due to stay-at-home orders.
It’s worth pointing out that despite the surge in its cloud services, Microsoft to date has reported no significant service disruption. Additionally, the enterprise refresh cycle, new subscription model and promising new products including Azure will continue to generate sizeable cash flows for the company.
The Zacks Consensus Estimate for its current-year earnings has moved up 4.7% over the past 90 days. The company’s expected earnings growth rate for the current and next year is 17.9% and 11.8%, respectively. Shares of Microsoft have outpaced the Computer – Software industry over the past six-month period (+11.6% vs +6.3%).
Source: Yahoo News
Coronavirus-Related Cloud Computing Tailwinds Buoy Alphabet
Alphabet Inc.’s GOOGL Google Cloud is one of the three major players in the U.S. cloud infrastructure market. Obviously, this will help the company to gain from the coronavirus-related cloud computing tailwinds in the next few quarters, and boost Alphabet’s overall growth trajectory.
By the way, Alphabet’s digital advertisement business remains unscathed from the coronavirus onslaught as consumers continue to engage in YouTube and Google Search. In fact, its focus on innovation, strategic acquisitions and Android OS should continue to generate strong cash flow. Currently, the company’s cash pile measures around $120 billion.
Alphabet’s expected earnings growth rate for the current and next year is 1.8% and 20.8%, respectively. Alphabet has surpassed the Internet – Services industry over the past two-year period (+8.2% vs -17.9%).
Source: Yahoo News
Alibaba Cloud Helps Medical Professionals Fight Coronavirus
Alibaba Group Holding Limited’s BABA cloud business unit, with the help of AI-led technologies, is providing data on the coronavirus and its diagnosis. Applications developed by the company’s cloud experts, researchers from its subsidiary DAMO Academy is expected to provide the necessary support to medical professionals across the globe in combating the spread of the virus.
The company’s dominance in the mobile commerce market, continued efforts to develop products, retail strength, international growth opportunities and strong financial position are positives.
The Zacks Consensus Estimate for its current-year earnings has risen 1.8% over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 10.4% and 31.3%, respectively. Shares of Alibaba have outdone the Internet – Commerce industry over the past six-month period (+10.6% vs +8.4%).
Source: Yahoo News