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These cloud computing stocks can march higher in 2024

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Cloud computing has helped corporations increase productivity and reduce costs. Once a business uses cloud computing, it continues to pay annual fees to keep its digital infrastructure.

Cloud solutions can quickly turn into a companys backbone. Its one of the last costs some companies will think of removing. Firms that operate in the cloud computing industry often benefit from high renewal rates, recurring revenue and the ability to raise prices in the future. Investors can capitalize on the trend with these cloud computing stocks.

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Amazon (NASDAQ:AMZN) had a record-breaking Black Friday and optimized its logistics to offer the fastest delivery speeds ever for Amazon Prime members. Over seven billion products arrived at peoples doors on the same or the next day or the order. Its a testament to Amazons vast same-day delivery network that encompasses 110 U.S. metro areas and more than 55 dedicated same-day sites across the United States.

The delivery network makes Amazon Prime more enticing for current members and people on the fence. The companys efforts paid off and resulted in 14% year-over-year (YoY) revenue growth in the fourth quarter of 2023.

Amazons ventures into artificial intelligence (AI) can also lead to meaningful stock appreciation. The companys generative AI investments have paid off and strengthened Amazon Web Services value proposition. Developers can easilyscale AI appswith Amazons Bedrock. These resources can help corporations increase productivity and generate more sales.

Innovations like these will help Amazon generate more traction for its e-commerce and cloud computing segments. The AI sector has many tailwinds that can help Amazon stock march higher for long-term investors.

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Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is a staple in many funds. The equity has outperformed the broader market with a 58% gain over the past year. Shares are up by 170% over the past five years.

Shares trade at a reasonable 22x forward P/E ratio. The stock initially lost some value after earnings but has parried some of its losses. The earnings report wasnt too bad, with 13% YoY revenue growth and 52% YoY net income growth.

Investors may have wanted higher numbers since Meta Platforms (NASDAQ:META) reported better results. However, a 7% drop in earnings didnt make much sense. The business model is still robust and is accelerating revenue and earnings growth. Alphabet also has a lengthy history of rewarding long-term investors.

Many analysts believe the equity looks like a solid long-term buy. The average price target implies a 9% upside. The highest price target of $175 per share suggests the equity can rally 16.5% from current levels.

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ServiceNow (NYSE:NOW) is an information technology company with an advanced cloud platform that helps corporations increase their productivity and sales. The equity has comfortably outperformed the market with 1-year and 5-year gains of 77% and 248%, respectively.

The company currently trades at a 61x forward P/E ratio, meaning youll need a long-term outlook to justify the valuation. ServiceNow certainly delivers on the financial front, increasing revenue by 26% YoY in Q4 2023. ServiceNow also reported $295 million in GAAP net income, a 97% YoY improvement. The company generated $150 million in GAAP net income during the same period last year.

Revenue is going up, and profit margins are accelerating. These are two promising signs for a company that boasts a 99% renewal rate for its core product. The companys subscription revenue continues to grow at a fast clip and generates predictable annual recurring revenue.

On this date of publication, Marc Guberti held a long position in NOW. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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The 3 Best Cloud Computing Stocks to Buy in February 2024 - InvestorPlace

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Cloud computing has helped millions of companies save time and money. Businesses dont have to worry about hardware costs and can access data quickly. Also, cloud computing companies offer cybersecurity resources to keep data safe from hackers.

Many stocks in the sector have outperformed the market over several years and can generate more gains in the years ahead. Therefore, these cutting-edge tech stocks look poised to expand and shape the future of cloud computing.

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ServiceNow(NYSE:NOW) boasts a high retention rate for its software and continues to attract customers with deep pockets. The company has over 7,700 customers and almost 2,000 of them haveannual contract values that exceed $1 million.

Further, NOWs remaining performance obligations are more than triple the companys Q3 revenue. The platform allows businesses to runmore efficient help desksand streamline repetitive tasks with built-in chatbots. Also, ServiceNow offers high-level security to protect sensitive data.

Additionally, the company has been a reliable pick for investors who want to outperform the market. Shares are up by 74% over the past year and have gained 284% over the past five years. The stock is trading at a 58-forward P/E ratio. The companys net income growth can lead to a better valuation in the future. And, ServiceNow more than tripled its profits year over year (YOY) in thethird quarter. Revenue grew at a nice 25% clip YOY.

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Alphabet(NASDAQ:GOOG, NASDAQ:GOOGL) makes most of its revenue from advertising and cloud computing. Google Cloud has become a popular resource for business owners, boasting over 500,000 customers. Also, Alphabet stands at the forefront of AI , enhancing the tech giants future product offerings.

Notably, the companys cloud segment remains a leading growth driver. Revenue for Google Cloud increased by 22.5% YOY in thethird quarter. And, Alphabets entire business achieved 11% YOY revenue growth, which is an acceleration from the previous period.

Also, Google Cloud reported a profitable quarter, swinging from a $440 million net loss in Q3 2022 to $266 million net income in Q3 2023. Alphabet investors positive response to the news helped the stock rally by 57% over the past year. The stock has gained 163% over the past five years.

Alphabet currently trades at a 22-forward P/E ratio and has a $1.8 trillion market cap. Finally, the companys vast advertising network gives them plenty of capital to reinvest in Google Cloud and the companys smaller business segments.

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Datadog(NASDAQ:DDOG) helps companies improve their cybersecurity across multiple cloud computing solutions. Cloud spending is still in its early innings and is expected to reach$1 trillion in annual spending in 2026. The company is projected to have a $62 billion total addressable market (TAM) in that year.

Specifically, Datadog removes silos and friction associated with keeping cloud applications safe from hackers. Over 26,000 customers use Datadogs software including approximately 3,130 customers with annual contract values exceeding $100,000. The companys revenue growth over the trailing twelve months is currently 31%. Further, operating margins have improved significantly to help the company secure a net profit in the third quarter.

In fact, DDOG has a good relationship with many cloud computing giants, including Alphabet. The two corporationsexpanded their partnership to close out 2023.

Investors have been rushing to accumulate Datadog stock in recent years. Shares have gained 68% over the past year and are up by 240% over the past five years. DDOG is still more than 35% removed from its all-time high. However, continued revenue growth and profit margin expansion can help the stock reclaim its all-time high.

On this date of publication, Marc Guberti held a long position in NOW. The opinions expressed in this article are those of the writer, subject to theInvestorPlace.com Publishing Guidelines.

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Beyond Cloud Nine: 3 Cutting-Edge Tech Stocks Shaping the Future of Computing - InvestorPlace