The concept of “the cloud” can spark confusion in some people. What is it? Where is it? The truth of the cloud is a lot less mystical than it seems. When information is stored in the cloud, that means it’s sent to a data center, where it’s protected by firewalls. The cloud has been around for a long time, but it’s become faster, safer and more widely available than ever, making it a must-have for consumers and businesses. Those benefits are only going to improve in 2019 and beyond.
Cloud companies offer services that can be completed online instead of on your own hard drive. Information can be stored on both your own hardware and the web, but if it’s not stored on the web at all, then it’s not cloud computing. Examples of cloud services include Apple iCloud and Google Drive, but there are many lesser-known offerings as well.
Cloud companies also have differing levels of investment in the cloud. For example, Apple is only partly cloud-based, while a software-as-a-service business like Shopify is entirely cloud-based. Cloud company stocks are simply stocks that you can buy in a cloud-based company, whether they’re partly or fully based in the cloud.
Cloud Company Stocks Are Gaining Popularity
The technology industry is dominant right now, and cloud computing has become the star. Here’s why:
- Cloud companies are churning out products all the time. There’s a lot of competition, but individual companies are also expanding their offerings. Think about Google — their cloud-based tools include Drive, the note-taking app Keep, Chrome and it’s million add-ons, etc.
- Cloud companies can roll out their products much faster than traditional companies that create a product or provide a service that requires more business-customer interaction.
- Cloud-based services can be quickly integrated for the user. The customer benefits from higher functionality and the business can collect more data on its customers in order to better serve them.
Cloud companies are a win-win for both the industry and consumers. Products and services are introduced to the market frequently, filling gaps for customers by delivering what they need and putting companies in a position to compete.
Cloud Companies Positively Impacting the Stock Market
Investing in cloud company stock is similar to investing in other types of stocks: you can play it safe, take huge risks, or find the right combination of both that suits your financial goals and your adventurous side.
Cloud Storage Company Stocks
Cloud storage companies offer secure cloud platforms to businesses that need high-level computing power, data storage that can scale, and fast content delivery. There are a few different versions of the cloud these companies can offer:
- Public Cloud: This is the most well-known type of cloud. Data storage is provided by the vendor.
- Private Cloud: Infrastructure is organized on the cloud, but the business has their own data center.
- Hybrid Cloud Options: Combination of the public cloud and private cloud.
There are big names in this industry, like Amazon Web Services (AWS), but there are smaller companies as well, like NetApp. Some of these companies strive to be successful even with big brands in the same marketplace. Part of how they do this is by offering both public and private cloud services to customers (AWS only offers public cloud services).
Other businesses, like Pure Storage, are in direct competition with public cloud providers like AWS, and some are deciding to partner with AWS. Most of these companies have valuable stocks — the main difference being that the lesser-known stocks are riskier while the big name companies are more of a sure thing, albeit more expensive.
More Cloud Companies With Great Stock Potential
Adobe Systems: Adobe has been around since the early ‘80s, long before the cloud took over the tech world, but they’re now an entirely cloud-based company. Their shares were up 26 percent for 2018; their revenue has been growing by 25 percent per year; and their net income has been increasing by 45 percent per year.
- Intuit: Intuit software focuses on accounting, taxes, and other financial services. The company saw $5.96 billion in revenue during its 2018 fiscal year. Over the last five years, shareholders have gained 177 percent in their shares.
- Microsoft: Microsoft is sort of a newcomer to the cloud, only getting on board in 2014. They’ve quickly become Amazon’s strongest competitor, though, with a market value of $690.4 billion.
These big guys aren’t the only ones to keep an eye on. Smaller cloud companies and startups can be a great investment too:
- You may have not heard of FireEye yet, but it’s one of the fastest-growing companies in one of the most powerful niches: data security.
- Developing code to enable in-app communications has always been a tricky process. Twilio solved this by creating a few lines of code that developers can easily use in their mobile apps to streamline communication, including calls, messages and video.
- Verisk Analytics, a data analytics company, is a high potential stock for 2019 for an interesting reason: Its executives and managers are purchasing shares of the company. This insider buying tells the public that the in-house team knows something that’s worth investing in.
When it comes to smaller or lesser-known companies, it pays to keep an eye on what’s happening with them, new services they’re rolling out and when new competitors emerge. This will tell you how well they’re doing as a company and what sort of stock potential they have.
The Future of Cloud Computing
Cloud computing isn’t going away. The future looks bright for cloud companies, the businesses that depend on them and the investors who buy up their stocks. Here’s what we can expect moving forward:
- There will be even more cloud solutions and companies that rely on them. Smart business owners will want to switch over to the cloud in order to simplify business processes and improve the customer experience.
- Better, faster performance thanks to upgraded platforms and robust data on customer behavior. Especially when that data is processed by analytics software, it can provide businesses with key insights to inform future business decisions.
- Consumers and businesses will be offered even more storage capacity than before. Companies will not only be able to store more data, but they’ll be able to access more detailed analytics.
- Cloud computing may be creating a new buzz phrase: the Internet of Everything, a replacement for the Internet of Things. Companies will continue to discover how the cloud can simplify interactions across the board.
- Security services will be more sophisticated in order to combat the evolving tactics of cyberattackers.
Cloud computing has taken the tech world by storm and, as a result, cloud companies have become huge players in the stock market. Are you ready to start investing in the newest wave of tech companies? Keep an eye on the stock market every day. Cloud companies change, evolve, and update their offerings constantly, which can cause changes in the stock market. Finding the best stocks to trade takes commitment, savvy, and developing a tried-and-true process.