It doesn’t take much more than a quick glance around our day-to-day lives to understand just how dramatically the cloud is transforming the world around us.
We’re surrounded by technology connected to the cloud — everything from cloud-based smartphone applications to the cloud-centric Chromebook. And a similar transformation is taking place in enterprises across the globe.
But when it comes to investing in the cloud, shapes shift so quickly that it can be hard to know exactly what you’re betting on. The line between on-premise and cloud is constantly blurring, and companies left and right are re-branding themselves as cloud companies in an attempt to latch onto the trend.
This confusion is likely part of the reason the biggest cloud providers like Amazon (AMZN), Google (GOOG) and Microsoft (MSFT) tend to get tossed out first anytime a discussion turns to cloud stocks. But there are plenty of other names that also fit the category.
Let’s take a look at three to consider if you want to invest in the cloud.
Cloud Stocks to Buy: Juniper Networks (JNPR)
Juniper Networks (JNPR), like many technology companies, describes its focus as the “network.” While that’s broad … and while for Juniper it means a mix of products and services … the cloud is indeed (and increasingly) a component of that.
From a straight investment perspective, JNPR is holding up pretty well despite the broader market’s weakness. Since the start of the year, shares have climbed around 15%.
Earnings are expected to grow at a double-digit clip long-term, and at a pace that’s right in-line with the stock’s forward P/E ratio. Tack on a 1.6% dividend yield — pretty substantial in the technology world — and Juniper Networks is definitely one of the cloud stocks most worth your attention.
Cloud Stocks to Buy: VMware (VMW)
VMware (VMW) is another cloud pick to consider, as it talks a good bit about the “hybrid cloud” approach that is rapidly becoming the enterprise norm. The company’s game is helping expand existing data centers into the cloud, which is especially appealing for enterprises with long-standing IT infrastructure.
VMWare stock has more or less moved sideways since 2011, but it still boasts growth prospects. More specifically, earnings are on tap to grow by a sweet 18% annualized rate over the next half-decade on the back of double-digit revenue growth.
Analysts seem optimistic that VMW can break out of its sideways “slump” too. While shares currently go for $85 a pop, the median price target is $95 — more than 11% upside.
Cloud Stocks to Buy: Amazon (AMZN)
It wouldn’t feel right to leave out one of the biggest hybrid cloud provider from this list. Indeed, cloud stocks like Amazon (AMZN) are the backbone of a key aspect of the hybrid trend.
For context, hybrid infrastructure might mean a mix between on-premise and cloud storage, or it might mean a mix between public and private clouds, depending on the context. Heck, even within the former hybrid model, the latter convergence might be evident.
Either way, public clouds have an important role for everyone from consumers to small businesses to enterprise giants, especially as costs continue to slide. Amazon is one of the biggest players in that space, and even those falling costs translate to its thickest margins, making it a natural company to give a nod to in this list of cloud stocks.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.