3 Top Cloud Computing Stocks to Invest In Before It’s Too Late

view original post

We live in a fast-paced modern world, and cloud computing and AI have become vital for every business in any sector. The use and demand for both innovations continue to grow, and investors holding cloud computing stocks have also been enjoying their gains. The benefits cloud computing provides (flexibility, scalability and cost-effectiveness) make it essential to most businesses.

Moreover, as remote work surges, demand for cloud computing has risen sharply. With companies investing heavily in cloud software, investors are eyeing opportunities. Although there have been market declines for cloud computing, this doesn’t entirely mean a bad thing. It allows buying into cloud computing stocks.

Experts also predict that the cloud computing sector will reach over $1.8 billion by 2031. Thus, if you’re considering buying cloud computing stocks, here are three I can highly recommend.

InvestorPlace – Stock Market News, Stock Advice & Trading Tips

Snowflake (SNOW)

Snowflake symbol and logo at the company corporate headquarters in Silicon Valley. SNOW stock.

Source: Sundry Photography / Shutterstock

First off the list of cloud computing stocks to own is Snowflake (NASDAQ:SNOW). Although the company is slightly smaller than other names in the industry, Snowflake should not be taken for granted. The company also works with the biggest names in the tech sector, including Alphabet (NASDAQ:GOOG, GOOGL) and Amazon (NASDAQ:AMZN).

SNOW stock saw a 20% decline after the company released excellent Q4 2023 earnings. Notably, the company’s poor guidance for 2025 pulled the stock down. Last year, SNOW stock saw a 38% increase, lagging behind Nasdaq’s 43%. The company anticipates more growth in 2024 from new products. However, analysts also think that generative AI projects must wait until 2025.

Snowflake is now managed by its newly appointed CEO and former Google executive, Sridhar Ramaswamy. Ramaswamy is optimistic that 2024 will be a significant year of gains for Snowflake.

ServiceNow (NOW)

ServiceNow office building in Silicon Valley;

Source: Sundry Photography / Shutterstock.com

ServiceNow (NYSE:NOW) comes second on this list of best cloud computing stocks. Recently, the company announced an expanded partnership with Microsoft (NASDAQ:MSFT) during its Knowledge 2024 event. The announced collaboration included plans to use generative AI in ServiceNow products. The new ServiceNow Now Assist and Microsoft Copilot integration combines two AI assistants, streamlining enterprise productivity tasks.

By merging Now Assist’s intelligence with Microsoft Copilot, employees can access help seamlessly, regardless of the platform. “We’re pioneering a new era of AI collaboration,” said CJ Desai, ServiceNow’s COO.

Moreover, ServiceNow fosters strong client loyalty with a 98% renewal rate. In Q1 2024, the company saw a 24% revenue increase and a 131% rise in net income, driving profit margins and stock growth. Shares surged 62% over the past year and 159% over five years, now trading at a 76-times earnings ratio.

Adobe (ADBE)

Adobe logo on the smartphone screen is placed on the Apple macbook keyboard on red desk background. ADBE stock.

Source: Tattoboo / Shutterstock

Once a creative software provider, Adobe (NASDAQ:ADBE) has expanded into cloud computing through its smart acquisitions. Purchases like Magneto, Workfront, and partnerships with Nvidia diversified its platform. Implementing generative AI into Firefly broadened creative possibilities.

Adobe’s Q1 2024 revenue hit $5.18 billion, with $750 million from document cloud software and a $1.17 billion cash flow. With its strong market position and diverse offerings, Adobe remains a top choice in cloud computing.

In recent news, Adobe launched Acrobat AI Assistant, which is available for individual users and businesses, aiming to boost its AI competitiveness. Users subscribe to access features starting at $4.99/month. This move aligns Adobe with big tech’s early AI monetization strategies. The assistant enables users to generate insights and create content, enhancing document productivity.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

More From InvestorPlace

The post 3 Top Cloud Computing Stocks to Invest In Before It’s Too Late appeared first on InvestorPlace.