The cloud infrastructure market has been growing at a fast pace over the past few years, which got a further push during the pandemic. As the pandemic spread rapidly, millions worked and learned from home. This led to the rapid growth of the cloud business as companies and organizations, including the healthcare sector, realized the future of digitization and started prioritizing digitization strategies.
Given this situation, it would be ideal to invest in stocks like
8x8, Inc. ( EGHT Quick Quote EGHT - Free Report) , Duck Creek Technologies, Inc. ( DCT Quick Quote DCT - Free Report) , Paycom Software, Inc. ( PAYC Quick Quote PAYC - Free Report) and Veeva Systems Inc. ( VEEV Quick Quote VEEV - Free Report) , which are likely to benefit in the near term. Cloud Infrastructure Spending on the Rise
According to a new report from Canalys, cloud infrastructure services spending grew 34% year over year in the first quarter of 2022 to reach $55.9 billion. This is an estimated $2 billion more than the previous quarter and $14 billion higher year over year.
Cloud infrastructure services include infrastructure-as-a-service (IaaS), software-as-a-service (SaaS), platform-as-a-service (PaaS) and hosted private cloud services.
As companies shift more toward digitalization, keeping in mind the ease of working from remote areas, demand for storage has been growing at a rapid pace. This has made companies shift focus to building business resiliency.
Moreover, people have finally realized the importance of digitization. Today, more companies are prioritizing cloud-enabled business transformation as they face global supply chain challenges, cybersecurity concerns and geopolitical uncertainty.
“Organizations of all sizes and vertical markets are turning to the cloud to ensure flexibility and resilience in the face of these challenges,” the report mentions. As a result of this growing demand, the report mentions that major cloud providers have witnessed a significant jump in order backlogs.
Also, according to the report, the top-three cloud service providers profited from greater adoption and size, growing 42% year over year and accounting for 62% of total global customer spend.
Cloud Business Poised to Grow
The concepts of working, learning and shopping changed following the COVID-19 outbreak in 2020. As a result, businesses started adopting SaaS. Also, most businesses have since realized the importance of storage and have started transferring data and information to technical and digital platforms in order to stay afloat in this competitive environment.
As a result, the cloud business has been benefiting. Also, cloud companies are increasing infrastructure spending to keep things moving. Higher spending is helping companies earn more revenues, with big players leading the race.
According to a new report from Gartner, global spending on public cloud services is estimated to grow 20.4% to $495 billion in 2022 as businesses ramp up their digital transformation in the post-COVID era.
Total spending on public cloud services is already $84 billion higher this year compared to the amount spent in 2020 and is projected to jump a whopping 21.3% to nearly $600 billion in 2023.
According to Gartner, infrastructure-as-a-service software is expected to witness the highest end-user expenditure growth of 30.6% in 2022 in overall cloud spending. It will be followed by desktop-as-a-service (26.6%) and platform-as-a-service (26.1%).
Given this situation, it would be ideal to invest in these four stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here. 8x8, Inc. is the provider of the world's first Communications Cloud that combines unified communications, team collaboration interoperability, contact center and real-time analytics in a single open platform. EGHT reduces complexity and costs, improves individual and team productivity as well as performance, and enhances the overall customer experience. 8x8 ensures high reliability and business continuity by delivering its cloud-based communications through the use of secure, fully redundant data centers.
8x8’s expected earnings growth rate for the current year is 75%. The Zacks Consensus Estimate for current-year earnings has improved 55.6% over the past 60 days. EGHT carries a Zacks Rank #2.
Duck Creek Technologies, Inc. is a provider of SaaS-delivered enterprise software to the property and casualty insurance industry. DCT provides Duck Creek policy, which allows insurers to create and market new insurance products as well as manage various areas of policy administration.
Duck Creek Technologies’ expected earnings growth rate for the current year is 25%. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the past 60 days. DCT has a Zacks Rank #2.
Paycom Software, Inc. is a provider of cloud-based human capital management software as a service solution for integrated software for both employee records and talent management processes. Founded in 1998, PAYC offers analytics that manages the complete employment life cycle from recruitment to retirement.
Paycom Software’s expected earnings growth rate for the current year is 23.4%. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past 60 days. PAYC has a Zacks Rank #2.
Veeva Systems Inc. offers cloud-based software applications and data solutions for the life sciences industry. VEEV’s product portfolio includes Veeva CRM (customer relationship management), Veeva Vault (content and information management), Veeva Network (customer master and product data management) and Veeva data services (Veeva OpenData and Veeva KOL data).
Veeva Systems’ expected earnings growth rate for the current year is 7.8%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. VEEV holds a Zacks Rank #2.