5 Cloud Stocks to Buy as Fears of a Second Wave Loom Large
The coronavirus pandemic has driven the work-and-play-from-home trend and it has been a boon for cloud businesses. Healthcare officials are apprehensive about a second wave as states undergo reopening program. In fact, many fear a resurgence during the fall and winter this year.
Lockdowns Keep Demand for Cloud High
As of Jul 15, the United States registered nearly 3,616,827 COVID-19 cases and the country saw 71,750 new cases and 1,001 deaths on the day. In fact, the single-day rise in cases has been constantly above 58,000 in the past week, with Miami becoming the new epicenter of the outbreak.
On Jul 13, U.S. states with high population started rolling back reopening efforts on rising new coronavirus cases. Governors of several states announced new mandates, imposed social-distancing norms and pausing the reopening process. Oregon Gov. Kate Brown banned private indoor gatherings of more than 10 people and made face coverings mandatory in public.
Following closely, California’s Gov. Gavin Newsom ordered statewide closure of bars and restricted indoor operations of restaurants, wineries, movie theaters and zoos. These fresh rounds of restrictions reflect the initial days of the pandemic, which was closely followed by states shutting down businesses in an attempt to slow the spread of the virus.
Availability of an effective vaccine seems bleak in the near term, while constant attempts toreopen the economy also increased the risks of a second wave of infection. Centers for Disease Control and Prevention (CDC) director Robert Redfield believed that “the fall and the winter of 2020 and 2021” could be a difficult time for Americans as chances of resurgence of the coronavirus infection are high.
Redfield also suggested that universal use of face masks would help bring the spread of coronavirus under control within four to eight weeks. However, with fears of a second wave looming and chances of another round of lockdown, investors can resort to cloud-based services and products.
Cloud computing has proved to be a promising investment arena in recent years but the coronavirus pandemic has only boosted its prospects. Per a marketsandmarkets.com report, the global cloud computing market size is expected to rise from $272 billion in 2018 to $623.3 billion by 2023, at a CAGR of 18%.
In fact, the cloud infrastructure and platform services market grew to $29 billion in the first three months of 2020. And half of the revenues came from Amazon’s Amazon Web Services (AWS) and Microsoft’s Azure that ended the first quarter with 32% and 18% market share, respectively.
Additionally, security technologies have been in high demand as companies shift business workloads to cloud computing service providers and security remains a major concern for many. Hence, companies offering security for cloud based services and products are also trending up.
What’s more? The cloud space is booming and private firms are now debuting into the stock exchange. On Jul 14, Cloud company nCino debuted on the Nasdaq and soared more than 170%, trading around $85 late in the day’s session after starting its IPO at $31 per share.
With people forced to stay indoors and having to rely on technology for work, education and entertainment, cloud stocks are sure to maintain the northward movement. Here are five cloud stocks that will move higher.
Zoom Video Communications, Inc. ZM provides a video-first communications platform and offers an enterprise cloud phone system. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Internet - Software industry’s estimated earnings growth of 4.9%.
The Zacks Consensus Estimate for its current-year earnings has climbed more than 100% over the past 60 days.Zoom Video sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortinet, Inc. FTNT provides broad, integrated, and automated cybersecurity solutions. The company’s expected earnings growth rate for the current year is 13.8% against the Zacks Security industry’s estimated earnings decline of 15.1%. The Zacks Consensus Estimate for its current-year earnings has climbed 2.2% over the past 60 days. Fortinet sports a Zacks Rank #1.
Box, Inc. BOX provides a cloud content management platform that enables organizations of various sizes to manage and share their content from anywhere on any device. The company’s expected earnings growth rate for the current year is more than 100% compared with the Zacks Internet - Software industry’s estimated earnings growth of 4.9%.The Zacks Consensus Estimate for its current-year earnings has climbed 35.1% over the past 60 days. Box carries a Zacks Rank #2 (Buy).
PagerDuty, Inc. PD operates a platform for real-time operations. The company belonging to the Zacks Internet - Software industry has an expected earnings growth rate of 14.3% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 13.3% over the past 60 days. PagerDuty carries a Zacks Rank #2.
Fastly, Inc. FSLY operates an edge cloud platform for processing, serving, and securing its customer's applications. The company’s expected earnings growth rate for the current year is 93.8% against the Zacks Internet - Software industry’s estimated earnings decline of 26.5%. The Zacks Consensus Estimate for its current-year earnings has climbed 69.1% over the past 90 days. Fastly carries a Zacks Rank #2
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