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Buy 5 Mid-Cap Stocks to Gain From Impressive Cloud Computing Momentum
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Key Takeaways
BILL, FIVN, FSLY, QLYS and CVLT are well-positioned to benefit from rising global cloud computing demand.
Each stock is projected to deliver solid earnings and revenue growth, with improving consensus estimates.
AI integration, cybersecurity demand, and cloud-native platforms are key drivers across the selected picks.
Cloud computing refers to the on-demand seamless access to computing resources such as servers, storage, databases, networking, software, analytics and intelligence over the Internet (the cloud) on a pay-per-use pricing model. It marks a paradigm shift from traditional on-premises infrastructure storage to remote cloud-based storage facilities and relies heavily on virtualization and automation technologies.
Instead of buying, owning and maintaining physical data centers and servers, organizations access a virtual pool of shared resources on an as-needed basis from a cloud service provider. This lowers operating costs, increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
BILL Holdings Inc.
Zacks Rank #1 BILL Holdings primarily caters to small and medium businesses (SMB) with its AI-enabled financial software platform that connects customers with their suppliers and clients. BILL is benefiting from an expanding clientele, and a diversified business model. BILL is also gaining from the strong adoption of its AI-powered financial operations platform to enhance customer experience by offering easier-to-use, more automated and predictive solutions.
BILL’s leadership in automating financial operations for SMBs has been a major growth driver. Its expanding product portfolio has been a key catalyst, while its strong balance sheet and free cash flow generating ability remain noteworthy.
BILL Holdings has an expected revenue and earnings growth rate of 13.5% and 7.8%, respectively, for next year (ending June 2026). The Zacks Consensus Estimate for the next-year earnings has improved 4.2% over the last 60 days.
Five9 Inc.
Zacks Rank #2 Five9 provides intelligent cloud software for contact centers in the United States, India, and internationally. FIVN offers a virtual contact center cloud platform that delivers a suite of applications, enabling a broad range of contact center-related customer service, sales, and marketing functions.
FIVN’s platform comprises interactive virtual agents, agent assistance, workflow automation, workforce engagement management, AI insights, and AI summaries. It allows the management and optimization of customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces.
FIVN has been benefiting from the growing adoption of AI tools in its call center services, with personalized AI agents emerging as a major growth driver. On Feb. 19, Five9 introduced its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud space. FIVN also released new Five9 AI agents tailor-made for Google Cloud.
Five9 has an expected revenue and earnings growth rate of 9.6% and 11.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the last 60 days.
Fastly Inc.
Zacks Rank #2 Fastly provides infrastructure software offering cloud computing, image optimization, security, edge computer technology and streaming solutions. On Dec.16, 2024, FSLY unveiled Fastly AI Accelerator, a semantic caching solution that allows developers to optimize their LLM generative AI applications.
FSLY operates an edge cloud platform for processing, serving, and securing its customers’ applications in the United States, the Asia Pacific, Europe, and internationally. FSLY’s Edge Cloud Platform offers more efficient performance as developers need only a single line of code instead of repeated calls to the AI provider to update their application to a new API endpoint.
Fastly has an expected revenue and earnings growth rate of 8.6% and 25%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 10% over the last 30 days.
Qualys Inc.
Zacks Rank #1 Qualys is benefiting from the increasing demand for cloud-based cybersecurity solutions amid growing cyber threats and digital transformation initiatives. With a diverse customer base that includes enterprises, SMBs and government entities, QLYS maintains a balanced customer mix, which keeps it resilient against fluctuations in IT spending.
QLYS’ continued innovation and focus on expanding product capabilities position it well to navigate market challenges and sustain long-term growth despite potential macroeconomic disruptions. A continuous increase in Vulnerability Management, Detection and Response to customer penetration is an upside.
Qualys' strategic acquisitions are pivotal in driving its growth trajectory. Since its inception, the company has acquired seven companies, of which Blue Hexagon was acquired in November 2022. Blue Hexagon's AI/ML capabilities enhanced QLYS’ threat detection and response solutions, bolstering its cybersecurity offerings.
Qualys has expected revenue and earnings growth rates of 7.3% and 0.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
Commvault Systems Inc.
Zacks Rank #1 Commvault Systems provides a cyber resilience platform for protecting and recovering data and cloud-native applications in the Americas and internationally. CVLT offers Operational Recovery, which provides backup, verifiable recovery, and cost-optimized cloud workload mobility to ensure data availability and granular recovery, autonomous recovery for automated disaster and cyber recovery use cases to deliver backup, replication, and disaster recovery for all workloads on-premises, in the cloud, across various clouds, and in hybrid environments, and Cyber Recovery for threat scanning to hunt for threats within backup data, cyber deception, and threat detection to provide early warning of attacks.
CVLT also provides Commvault Cloud's Cleanroom Recovery for organizations to be ready to recover by providing a clean, isolated, and on-demand recovery location in the cloud, as well as the ability to test their incident response plans and recover, and Commvault HyperScale X, an intuitive, easy-to-deploy and scale-out, and integrated data protection solution to support enterprises' transformations, such as legacy scale-up infrastructures, hybrid cloud, container, and virtualized environments.
Commvault Systems has expected revenue and earnings growth rates of 14% and 13.2%, respectively, for the current year (ending March 2026). The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the last 30 days.
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Buy 5 Mid-Cap Stocks to Gain From Impressive Cloud Computing Momentum
Key Takeaways
Cloud computing refers to the on-demand seamless access to computing resources such as servers, storage, databases, networking, software, analytics and intelligence over the Internet (the cloud) on a pay-per-use pricing model. It marks a paradigm shift from traditional on-premises infrastructure storage to remote cloud-based storage facilities and relies heavily on virtualization and automation technologies.
Instead of buying, owning and maintaining physical data centers and servers, organizations access a virtual pool of shared resources on an as-needed basis from a cloud service provider. This lowers operating costs, increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale.
We have narrowed our search to five mid-cap cloud computing-centric stocks to benefit from the space’s astonishing global demand. These are: BILL Holdings Inc. (BILL - Free Report) , Five9 Inc. (FIVN - Free Report) , Fastly Inc. (FSLY - Free Report) , Qualys Inc. (QLYS - Free Report) and Commvault Systems Inc. (CVLT - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
BILL Holdings Inc.
Zacks Rank #1 BILL Holdings primarily caters to small and medium businesses (SMB) with its AI-enabled financial software platform that connects customers with their suppliers and clients. BILL is benefiting from an expanding clientele, and a diversified business model.
BILL is also gaining from the strong adoption of its AI-powered financial operations platform to enhance customer experience by offering easier-to-use, more automated and predictive solutions.
BILL’s leadership in automating financial operations for SMBs has been a major growth driver. Its expanding product portfolio has been a key catalyst, while its strong balance sheet and free cash flow generating ability remain noteworthy.
BILL Holdings has an expected revenue and earnings growth rate of 13.5% and 7.8%, respectively, for next year (ending June 2026). The Zacks Consensus Estimate for the next-year earnings has improved 4.2% over the last 60 days.
Five9 Inc.
Zacks Rank #2 Five9 provides intelligent cloud software for contact centers in the United States, India, and internationally. FIVN offers a virtual contact center cloud platform that delivers a suite of applications, enabling a broad range of contact center-related customer service, sales, and marketing functions.
FIVN’s platform comprises interactive virtual agents, agent assistance, workflow automation, workforce engagement management, AI insights, and AI summaries. It allows the management and optimization of customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces.
FIVN has been benefiting from the growing adoption of AI tools in its call center services, with personalized AI agents emerging as a major growth driver. On Feb. 19, Five9 introduced its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud space. FIVN also released new Five9 AI agents tailor-made for Google Cloud.
Five9 has an expected revenue and earnings growth rate of 9.6% and 11.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the last 60 days.
Fastly Inc.
Zacks Rank #2 Fastly provides infrastructure software offering cloud computing, image optimization, security, edge computer technology and streaming solutions. On Dec.16, 2024, FSLY unveiled Fastly AI Accelerator, a semantic caching solution that allows developers to optimize their LLM generative AI applications.
FSLY operates an edge cloud platform for processing, serving, and securing its customers’ applications in the United States, the Asia Pacific, Europe, and internationally. FSLY’s Edge Cloud Platform offers more efficient performance as developers need only a single line of code instead of repeated calls to the AI provider to update their application to a new API endpoint.
Fastly has an expected revenue and earnings growth rate of 8.6% and 25%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 10% over the last 30 days.
Qualys Inc.
Zacks Rank #1 Qualys is benefiting from the increasing demand for cloud-based cybersecurity solutions amid growing cyber threats and digital transformation initiatives. With a diverse customer base that includes enterprises, SMBs and government entities, QLYS maintains a balanced customer mix, which keeps it resilient against fluctuations in IT spending.
QLYS’ continued innovation and focus on expanding product capabilities position it well to navigate market challenges and sustain long-term growth despite potential macroeconomic disruptions. A continuous increase in Vulnerability Management, Detection and Response to customer penetration is an upside.
Qualys' strategic acquisitions are pivotal in driving its growth trajectory. Since its inception, the company has acquired seven companies, of which Blue Hexagon was acquired in November 2022. Blue Hexagon's AI/ML capabilities enhanced QLYS’ threat detection and response solutions, bolstering its cybersecurity offerings.
Qualys has expected revenue and earnings growth rates of 7.3% and 0.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days.
Commvault Systems Inc.
Zacks Rank #1 Commvault Systems provides a cyber resilience platform for protecting and recovering data and cloud-native applications in the Americas and internationally. CVLT offers Operational Recovery, which provides backup, verifiable recovery, and cost-optimized cloud workload mobility to ensure data availability and granular recovery, autonomous recovery for automated disaster and cyber recovery use cases to deliver backup, replication, and disaster recovery for all workloads on-premises, in the cloud, across various clouds, and in hybrid environments, and Cyber Recovery for threat scanning to hunt for threats within backup data, cyber deception, and threat detection to provide early warning of attacks.
CVLT also provides Commvault Cloud's Cleanroom Recovery for organizations to be ready to recover by providing a clean, isolated, and on-demand recovery location in the cloud, as well as the ability to test their incident response plans and recover, and Commvault HyperScale X, an intuitive, easy-to-deploy and scale-out, and integrated data protection solution to support enterprises' transformations, such as legacy scale-up infrastructures, hybrid cloud, container, and virtualized environments.
Commvault Systems has expected revenue and earnings growth rates of 14% and 13.2%, respectively, for the current year (ending March 2026). The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the last 30 days.