In the matter of just a few years, “the Cloud” has evolved from the new feature that your grandmother just can’t quite seem to understand to one of the main factors driving growth in the technology sector.
Cloud computing is now an essential focus for software-related companies, and cloud stocks have piqued the interest of many tech-focused investors.
New technologies and changing consumer behavior have changed the shape of the technology landscape, and an industry that was once centered on the personal computer has adapted to survive in the world of mobile computing and the Cloud.
The markets have been paying attention, and some of the best tech stocks have been those that are either primarily cloud-based companies, or those that have shown growth in their cloud operations.
With this in mind, we’ve highlighted three stocks that are not only showing strong cloud-related activity, but also strong fundamental metrics.
Check out these three cloud stocks to buy right now:
Adobe Systems Incorporated (ADBE)
Adobe Systems Incorporated (NASDAQ:ADBE) is a provider of graphic design, publishing, and imaging software for Web and print production. The company’s main offering is its “Creative Cloud,” which is a software-as-a-service (SaaS) product that allows users to access all of Adobe’s tools at one monthly price. The stock currently has a Zacks Rank #2 (Buy).
Within the last 60 days, we have seen at least one positive estimate revision for Adobe’s current-quarter, next-quarter, full-year, and next-year earnings. Our consensus estimate for the quarter calls for EPS growth of 40% on sales growth of nearly 24%
Five9 Inc (FIVN)
Five9 Inc (NASAQ:FIVN) provides cloud software for contact centers. The company offers software products such as workforce management, speech recognition, predictive dialer, and voice applications, as well as an all-in-one contact center cloud platform. Currently, FIVN holds a Zacks Rank #2 (Buy).
Five9 is still a loss-making company, but it recently surpassed our Zacks Consensus Estimate by 40%, and we’ve seen four positive revisions for its full-year earnings within the last week. With sales projected to grow by nearly 20% this year and the stock gaining more than 25% in 12 weeks, Five9 has earned “A” grades for both Growth and Momentum.
VMWare, Inc. (VMW)
VMware, Inc. (NASAQ:VMW) provides cloud and virtualization software and services. Its solutions enable organizations to aggregate multiple servers, storage infrastructure, and networks together into shared pools of capacity that can be allocated dynamically, securely and reliably to applications as needed, increasing hardware utilization and reducing spending. The stock is currently a Zacks Rank #2 (Buy).
Despite its long history, VMWare is still growing its earnings, and our current consensus estimates call for EPS growth of nearly 15% this quarter. The stock has been on an impressive run, gaining more than 20% year-to-date. Its P/E ratio, ROE, and Net Margin all out-perform the industry average, and it could be on the cusp of breaking into a new range as it nears its 52-week high.
The Bottom Line on Cloud Computing Stocks: Among the Best Stock Performers
Cloud-based companies have been some of the best performing stocks in the tech sector this year, and these cloud stocks also boast strong fundamental metrics. If you’re looking to add tech stocks to your portfolio right now, this list is probably a good place to start.
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