4 stocks to buy in a booming cloud services market – September 29, 2021
The cloud infrastructure market was already flourishing, and the COVID-19 pandemic has helped it continue to grow at a rate few expected. As millions of people worked and learned from home and businesses scrambled to store massive amounts of data, cloud business took a boost.
As most businesses now rely on cloud-based solutions, digital transformation will only help the cloud market to grow further in the coming days.
Cloud infrastructure spending on the rise
As more people work and learn remotely, companies are embracing Software as a Service (SaaS), helping businesses that deliver cloud-based solutions. According to a new report released by Information Services Group (ISG), a large number of US companies feel more comfortable purchasing software and infrastructure as a service.
According to the report, the annual contract value of large cloud-based as-a-service commitments climbed 33% to a record high of $ 5.9 billion in the Americas region. Additionally, annual contract value increased 31% to a record $ 1.9 billion for Software as a Service (SaaS) and 33% to $ 3.9 billion for infrastructure. as a service (IaaS).
The pandemic has seen more people working, learning and even shopping from home, which has increased pressure from businesses to store data. This has prompted companies to plan more for business resilience and move data and information to technology and digital platforms to stay afloat, thereby benefiting cloud business.
The cloud market is about to grow
Cloud providers are increasing infrastructure spending, which is boosting their revenue. According to Gartner, IaaS, Platform as a Service (PaaS) and SaaS spending accounted for a meager $ 182.4 billion, or 1% of the total IT infrastructure spending of $ 3.7 trillion globally. 2018.
However, that changed quickly, especially after the pandemic struck. According to the report, global cloud, IaaS spending increased 41% in 2020 to $ 64.3 billion and is expected to reach $ 331 billion by 2022.
The increased focus on cybersecurity is expected to help the cloud-based services market in the coming days. The US government has also increased its spending on cybersecurity by investing in cloud services and has shelled out over $ 1 billion.
Microsoft Corporation (MSFT – Free Report) is one of the world’s largest large-scale technology providers. It is also one of the largest public cloud providers capable of delivering a wide variety of IaaS and PaaS solutions at scale.
The company’s expected profit growth rate for the current year is 8.4%. Its shares have risen 5.5% in the past three months. Microsoft has a Zacks Rank # 2.
j2 Global, Inc. (JCOM – Free Report) provides information and Internet services. The company has two main lines of business: digital media and cloud services. Digital Media specializes in the tech, shopping, gaming and healthcare markets, providing content, tools and services to consumers and businesses. Cloud Services operates a portfolio of web properties and applications including IGN, Mashable, PC Mag, Humble Bundle, Speed test, Offers, Black Friday, AskMen, MedPage Today, Everyday Health, and What to Expect.
The company’s expected profit growth rate for the current year is 18.8%. Zacks’ consensus estimate for current year earnings has improved 3.1% in the past 60 days. j2 Global has a Zacks # 2 rank.
Dropbox, Inc. (DBX – Free Report) provides users with a platform that allows them to store and share files, photos, videos, songs, and spreadsheets. Dropbox, Inc. is headquartered in San Francisco, California.
The company’s expected profit growth rate for next year is 54.8%. Zacks’ consensus estimate for current year earnings has improved 5.9% in the past 60 days. Dropbox has a Zacks # 2 rank.
Paycom Software, Inc. (PAYC – Free Report) provides cloud-based human capital management software as a service solution for integrated software for employee records and talent management processes. It serves more than 23,500 clients, or nearly 12,700 clients based on the Grouping of Parent Companies.
The company’s expected profit growth rate for the current year is 25.8%. Zacks’ consensus estimate for current year earnings has improved 3.5% over the past 60 days. Paycom sports a rank of Zacks # 1.