Cloud computing has solidified its position as the backbone of modern business operations. This begs the question: what is the best cloud computing stocks to buy?
As businesses embrace the era of AI and continue to migrate their operations to the cloud, demand will grow even stronger. Its flexibility, scalability, and cost-effectiveness make it a no-brainer for companies seeking to optimize their digital infrastructure. As the cloud computing market continues its upward trajectory, identifying the top performers that will continue to soar in 2024 becomes paramount.
So, here are the top 3 cloud computing stocks to buy in 2024 and beyond!
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT), with its intelligent cloud platform Azure, stands as a dominant force in the cloud computing market. The company remains an undisputed leader in the AI race, which is set to drive Azure cloud deployments in fiscal year 2024.
One of Microsoft’s core offerings across its entire technology stack is productivity. This is a major selling point to its cloud customers who are looking to get work done more efficiently. The long term tailwinds in generative AI do just that, and Microsoft’s Copilot software is gaining significant traction. Moreover, it continues to drive diversified growth across all segments of the business. In Q3 FY24, revenue increased 17% year over year to $61.9 billion, with EPS up 20% to $2.94 per share. However, Wall Street was more impressed with Microsoft’s cloud revenue which increased 23% from the year prior. It remains abundantly clear that AI is not just hype, and Microsoft’s Azure will be pivotal in driving this revolutionary technology forward.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is synonymous with cloud computing and its cloud platform, AWS, remains the largest cloud provider in the world. It holds close to one third of the cloud infrastructure market, making it a top contender for the best cloud computing stock to buy.
AWS enjoys a strong first-mover advantage which has paid dividends to the company’s bottom line. Amazon Web Services (AWS) is the glue that keeps the business together, and will play a crucial role in the building, scaling and deployment of generative AI applications. Additionally, the demand for cloud services will remain strong in 2024, coinciding with the demand for AI hardware, including AI graphic processing units (GPUs). Investors remain bullish on its cloud business, as well as its comprehensive generative AI platform, Amazon Bedrock. Since employing restructuring efforts in 2023, nearly every aspect of the business has turned for the better. While AI is the primary story for mega cap tech stocks in 2024, Amazon’s growing advertising business is going to be the “dark horse.” With profitability expected to skyrocket in Q1FY24, now is a great time to scoop up shares before it takes off.
Oracle (ORCL)
Oracle (NYSE:ORCL), known for its legacy database solutions, is spearheading growth in the cloud. It has been aggressively investing in its Gen2 cloud infrastructure, which will be pivotal to meeting the demand of generative AI workloads.
Oracle is currently at the forefront of the AI boom, and its cloud computing services are pivotal to this technological transformation. The company’s long term valuation proposition remains compelling, as Gen2 cloud infrastructure continues to experience unprecedented demand. This is a result of the platform’s unique capabilities, specifically tailored for enterprise workloads and large data sets. In Q3 FY24, cloud infrastructure revenue hit $1.8 billion, up 49% YOY. Total remaining performance obligations increased 29% to over $80 billion, sitting at an all time high. Oracle continues to sign new large cloud contracts, with its cloud business at a $20 billion annual run rate in 2024. As demand for cloud infrastructure continues to skyrocket, Oracle remains one of the top cloud computing stocks to buy now.
On the date of publication, Terel Miles 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.
