The cloud consists of data centers loaded with servers and data storage systems. All of those data centers, of course, contain huge amounts of data. By using the cloud, companies enable themselves and their customers to quickly and easily access their information. This has led to the rise of the best cloud computing stocks to buy.
Therefore, it’s logical to assume that, as the amount of data that companies handle explodes, the demand for cloud computing will surge. And as the Internet of Things, artificial intelligence, and autonomous driving proliferate, the growth of data usage is indeed expected to greatly accelerate.
In light of those points, I believe that it’s a good idea to invest in cloud computing stocks. Here are three of the best cloud computing stocks to buy.
Amazon (AMZN)
On Aug. 3, Amazon (NASDAQ:AMZN) reported very strong second-quarter results, as its North American operating income reached the highest point since 2021, while its top line jumped 11% versus the same period a year earlier. During the current quarter, the cloud giant expects its operating income to be $5.5 billion to $8.5 billion, well above the $2.5 billion of OI that it generated during Q3 of 2022.
The revenue of the company’s cloud unit, AWS, rose 12% year-over-year to $22.1 billion. And the unit looks poised to rebound going forward, as Amazon’s CFO Brian Olsavsky reported “that the business is stabilizing and cost optimizations are moderating,” according to Seeking Alpha.
“I am bullish about (AWS) in the medium to long-term, for sure,” the CFO stated.
Investment firm Monness, Crespi, Hard was upbeat about AWS in the wake of its results, citing its “stability.”
I believe that, as companies’ data use surges, and AWS helps many firms utilize AI, the unit’s growth and profits will accelerate greatly. As a result, AMZN is one of the best cloud computing stocks to buy.
IBM (IBM)
As I noted in a previous column, “the revenue of OpenShift, IBM’s hybrid cloud platform, soared over 30% YOY in Q2 ‘and now has $1.1 billion in annual recurring revenue,’ CFO Jim Kavanaugh reported. So it sounds like Big Blue’s hybrid cloud strategy is really hitting on all cylinders.
Among the impressive users of IBM’s hybrid cloud offering in Q2 were the large liquor maker Diageo (NYSE:DEO), Air Canada (OTC:ACDVF), and Nokia (NYSE:NOK).
Bank of America (NYSE:BAC) responded to the company’s Q2 results by raising its price target on the shares to $160 from $152, while Morgan Stanley (NYSE:MS) includes IBM in its Dividend Equity Portfolio.
And the company’s new AI platform, Watson X, has a huge amount of potential, as “more than 150 enterprises, including Citi (NYSE:C) and NASA” are already utilizing the new offering, while “the number of consulting deals IBM signed (climbed) 24% last quarter versus the same period a year earlier.”
Oracle (ORCL)
Like IBM, Oracle’s (NYSE:ORCL) cloud business is expanding rapidly, as its “cloud services and license support revenue” surged 23% in Q2 versus the same period a year earlier to $9.4 billion.
And the firm’s “cloud applications and infrastructure businesses…grew at a combined rate of 50% in constant currency,” CEO Safra Catz reported. Also boding very well for the longer-term outlook of Oracle and ORCL stock, the company’s Gen2 Cloud is now “the number one choice for running Generative AI workloads, ” founder and CTO Larry Ellison reported. Additionally, Nvidia (NASDAQ:NVDA) is utilizing Oracle’s “GPU clusters” to build its “AI infrastructure,” Ellison stated.
Finally, according to Ellison, Oracle’s “GPU clusters are built using the highest-bandwidth and lowest-latency RDMA network—and scale up to 32,000 GPUs.”
ORCL has a very high Relative Strength score of 92 and a strong Accumulation/Distribution rating of B, according to Investor’s Business Daily, indicating that the momentum of ORCL stock is solid.
On the date of publication, Larry Ramer did not hold (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.
