The 3 Most Undervalued Cloud Stocks to Buy in June 2024


  • AI developments have accelerated the demand for strong data center networking and cloud infrastructure. Catch these three cloud picks before they explode!
  • Data Storage Corporation (DTST): A pure-play data storage stock that recently picked up a collaboration with a leading insurance company.
  • NICE (NICE): A cloud company focusing on consumer experience to grab hold of a fast-growing addressable market.
  • Oracle (ORCL): Recent Palantir partnership set to drive high growth and profitability synergies.
Undervalued Cloud Stocks - The 3 Most Undervalued Cloud Stocks to Buy in June 2024

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As the internet and the digital world continue driving economic growth, many industries will prosper. For example, cloud technology has seen massive growth in the past decade and could keep growing at a 21% compound annual growth rate (CAGR) into 2030. However, not all growing companies in the sector receive the same attention, leading to some undervalued cloud stocks to keep an eye on.

Typically, cloud technology companies provide computing resources or online data storage services to consumers. Especially now that artificial intelligence is rapidly advancing, large-scale customers are increasingly in need of cloud services to support their artificial intelligence (AI) data centers and infrastructure. But, beyond just enterprises, even the average consumer relies on the cloud as a storage system external for personal devices. Thus, it can be easy to see why this industry is so important going forward and will continue to attract plenty of demand.

As investors, we want to maximize returns. That means picking and investing in companies that are sitting at just the right valuation to buy at. In this article, we will highlight three such undervalued cloud stocks that are a worthy addition to any portfolio.

Data Storage Corporation (DTST)

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Data Storage Corporation (NASDAQ:DTST) is a company that works to provide cloud storage solutions to businesses, primarily for the protection and storage of data. While the stock gained over 200% in the past year, it still has more room to run. Yahoo Finance analysts have an average one-year price target of $9.00, well above the current price of $6.27. 

Even though this company is small, it is making big moves in some interesting growth avenues. For example, DTST recently announced that its CloudFirst Solutions won the business of one of the largest insurance companies in the U.S. to help store its data with its cloud services. As management guides, this development will be integral in helping DTST continue having a steady stream of recurring, high-margin revenue.

Taking a look at the company’s valuation, we can see that its EV/Sales ratio of 1.38x sits far below the sector median of 3.12x. Thus, when compared to its peers, the stock appears among relatively undervalued cloud stocks. With EPS expected to also grow over 200% year-over-year, Data Storage offers a cheap, cloud growth play to investors at a more than fair price. 


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NICE (NASDAQ:NICE) is a cloud-based AI software company that is a global leader in both customer engagement and financial crime & compliance end markets. While this Israeli-based company may be more unfamiliar to U.S. investors, Yahoo Finance analysts currently sit with a bullish one-year price target between an average of $283.71 to a high of $339.

For NICE, growth comes from its innovative way of combining cloud and AI technology to boost its product offering and financials. More recently, customer experience (CX) remains a key growth driver as Chatbots work to improve their user experience. In fact, Mordor Intelligence expects more than a doubling in the CX market’s valuation from $19 billion in 2024 to $43 billion in 2025! Given that NICE’s customer experience platform CXone is regarded as one of the best in its industry, there’s no doubt that NICE will be able to grab a lion’s share of this CX market growth.

While this company is up more than 400% in the past decade, its stock is currently seeing a pullback. Furthermore, when taking a look at its P/E ratio of 18.3x, we see that it trades at a nearly 50% discount compared to its 5-year average. For a company with such a strong history and future growth plans, it would be foolish not to pick up a few shares before it rebounds.

Oracle (ORCL)

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Oracle (NYSE:ORCL) is a well-known IT company that has recently seen tremendous growth in its Cloud and AI business. In particular, its advancement in databases for Large Language Models has sparked optimism in many investors as a safe tech play during the current market turbulence. Wall Street analysts currently forecast a one-year price target between an average of $140.34 and a high of $160.

While Oracle has always been a strong contender in the AI cloud database market. its recent partnership with Palantir Technologies (NYSE:PLTR) is set to help both companies accelerate their offerings to enterprises. Some key synergies include PLTR’s Foundry workload transition to Oracle’s cloud infrastructure, as well as the deployment of Oracle’s generative AI applications to complement Palantir’s Gotham AI platform.

These high-growth prospects benefit even further from Oracle’s relatively attractive multiples. When looking at Oracle’s forward P/E ratio of 21.5x, we notice that it’s a solid 10% under its sector median. With so many recent AI tech stocks inflated to crazy multiples and prices currently, Oracle stands as an undervalued cloud company offering just as much growth potential at a much cheaper price point.

On the date of publication, Ian Hartana and Vayun Chugh 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 Publishing Guidelines.

Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.

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