6 Top Cloud Computing Stocks for 2024

As we enter the bullish market of 2024, the spotlight is firmly on cloud computing stocks. Over the past decade, cloud computing has transformed business operations, offering benefits such as enhanced collaboration, scalability, cost-effectiveness, and improved data security. With the cloud computing market poised for significant growth, investors should keep an eye on companies that can adapt to rapid market changes. In 2024, business spending on cloud infrastructure is expected to surpass $1 trillion for the first time, driven by the increasing demand for new platforms and as-a-service options. Looking ahead, the cloud computing market is forecasted to reach a staggering $1.24 trillion by 2028, underlining its immense investment potential.

Now, let’s delve into the top cloud computing stocks that are set to shine in 2024.

1. Amazon (AMZN)

Amazon (NASDAQ: AMZN) has had a remarkable year, with its stock surging over 74% year-to-date (YTD), largely driven by its cloud computing arm, Amazon Web Services (AWS). AWS is the world’s leading cloud computing entity, and it solidified its position further with innovative developments in 2023. The AWS Reinvent conference showcased groundbreaking advancements in generative AI and cloud security. Notable releases include the Graviton4 and Trainium2 chips, designed to revolutionize generative AI and high-demand workloads. AWS’s financial performance in the latest quarter also reflects its progress, with a 13% year-over-year (YOY) revenue increase and a remarkable 244% surge in net income.

2. Microsoft (MSFT)

Microsoft (NASDAQ: MSFT) is making significant strides, with Microsoft Azure leading the charge in generative AI services. The introduction of Azure Cobalt, a custom CPU for cloud applications, and Azure Maia, a custom-designed AI accelerator chip, underscores Microsoft’s strength in cloud computing and AI infrastructure. Microsoft’s collaboration with NVIDIA to build the world’s fastest cloud AI computer further demonstrates its commitment to innovation. Financially, Microsoft has shown robust performance, with a 13% revenue increase to $56.5 billion and a 26.97% jump in net income to $22.3 billion.

3. Alphabet (GOOG, GOOGL)

Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL) has become a significant player in the cloud computing market, offering a range of services from AI and machine learning to data storage. After years of operating its cloud business at a loss, Alphabet reported its first operating profit in this sector in early 2023, marking a significant milestone. The Google Cloud Next 2023 event emphasized Alphabet’s transition to an AI-first strategy, leading to remarkable improvements across its product range. Alphabet’s financial strength is evident, with global revenue growth of 11% YOY to $76.69 billion and a net profit surge of 41.55%. Google Cloud achieved a record $8.41 billion in revenue, a 22.47% increase from the previous year.

4. ServiceNow (NOW)

ServiceNow (NYSEThe New York Stock Exchange (NYSE) is a global financial powerhouse, and at the heart of its performance measurement stands the NYSE Composite Index (NYA). This comprehensive index... More: NOW) is a notable player in cloud computing, serving over 7,700 global enterprise customers with software designed to streamline work processes and enhance cyberattack defenses. NOW shares have seen an impressive 81% increase YTD, approaching their all-time high from late 2021. The launch of NOW’s latest platform, Vancouver, represents a significant leap in AI utilization, allowing users to create computer programs using natural language. Financially, NOW demonstrates robust growth, with revenues reaching $2.28 billion, a 25% increase YOY, and a remaining performance obligations figure of $7.43 billion. With consistent expansion and a leading position in cloud computing, NOW is a top performer.

5. Datadog (DDOG)

Datadog (NASDAQ: DDOG) stands out in the cloud computing sector by enabling businesses to effectively manage their cloud infrastructure and focus on cybersecurity. The company safeguards critical data and specializes in overseeing cloud systems, earning trust from renowned clients like Twilio, Nasdaq, and Maersk. Datadog is enhancing AI ecosystems by using Large Language Models (LLM) for efficient troubleshooting, optimizing performance and user experience. Financially, DDOG stands out with a 70% YTD gain and a 226% increase over the past five years. The company’s recent 25.4% YOY revenue growth and the surge in customers paying over $100,000 in annual recurring revenue underscore Datadog’s sustained growth and profitability.

6. Zscaler (ZS)

Zscaler (NASDAQ: ZS) continues to shine as one of the top performers in the cloud computing market. The stock boasts an impressive 101% increase YTD and a 479% gain over the past five years, demonstrating resilience and underscoring its enduring appeal in the sector. At the core of Zscaler’s success is its robust cloud security platform, protecting critical documents and data across both public and private clouds. Zscaler kicked off its latest quarter with a robust 40% YOY revenue growth and billings rose by 34%, indicating sustained and strong revenue potential. Collaborating with CrowdStrike and Imprivata, Zscaler recently introduced a zero-trust security solution for healthcare organizations, enhancing visibility and threat protection. These strategic initiatives solidify Zscaler’s role as a leading force in the cloud computing field.

Bottom-line: As the cloud computing market continues its rapid expansion, these top cloud computing stocks are positioned for significant growth in 2024. With innovative advancements in AI, cybersecurity, and cloud infrastructure, these companies demonstrate their ability to adapt to market changes and capitalize on the growing demand for cloud services. As an investor, keeping a close eye on these cloud computing leaders may lead to promising opportunities in the evolving technology landscape.