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Cloud computing remains a dominant investment theme, particularly so during the AI era.
For those seeking exposure, Zacks Thematic Screens can lend a hand.
Zacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you..
Let’s take a closer look at the ‘Cloud Computing’ theme and analyze a stock within, namely Microsoft (MSFT - Free Report) .
Cloud Computing Overview
Cloud computing refers to the on-demand seamless access of 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 from a cloud service provider on an as-needed basis.
This lowers operating costs, increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale.
Microsoft Earnings
Many have grown skeptical of the immense capital being thrown around in the broader AI frenzy, which helps explain the poor post-earnings reaction to the recent Microsoft results. Investors are beginning to demand results from the investments for understandable reasons, driven by the lofty forecasts we’ve seen over the past several years.
Microsoft’s Intelligent Cloud segment, which includes Azure, saw sales grow 28% year-over-year to $32.9 billion throughout its latest period, though the segment’s gross margin took a hit due to continued AI investments.
Concerning Azure and cloud services revenue specifically, sales grew 31% year-over-year, reflecting a deceleration relative to recent growth rates of 35% and 39% across its previous two periods, respectively. For years, investors have placed a strong emphasis on accelerating cloud revenue, which has often dictated post-earnings reactions across the space, a key factor to keep in mind when targeting these stocks.
Bottom Line
Thematic investing has emerged as a powerful way for investors to sync their portfolios with emerging trends. A mix of long-term and short-term themes is increasingly dictating which companies lead as economies expand and markets shift.
While stocks in each theme aren't direct recommendations, they offer a solid starting point. Leverage the Zacks Rank and other metrics to identify the best stocks for your strategy. Each featured stock comes with a Zacks report, giving you the tools to analyze performance and potential.
The Cloud Computing thematic list, which currently Microsoft (MSFT - Free Report) is part of, focuses on technology companies that provide the related hardware and software to enable cloud computing services, the communication service providers that offer the network facilities and the various firms that utilize the services across diverse sectors like financial, consumer discretionary, and industrials.
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Seeking Cloud Computing Exposure? Use This Tool
Key Takeaways
Zacks Thematic Screens lets you dive into 30 dynamic investment themes shaping the future. Whether you're interested in cutting-edge technology, renewable energy, or healthcare innovations, our themes help you invest in ideas that matter to you..
Let’s take a closer look at the ‘Cloud Computing’ theme and analyze a stock within, namely Microsoft (MSFT - Free Report) .
Cloud Computing Overview
Cloud computing refers to the on-demand seamless access of 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 from a cloud service provider on an as-needed basis.
This lowers operating costs, increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale.
Microsoft Earnings
Many have grown skeptical of the immense capital being thrown around in the broader AI frenzy, which helps explain the poor post-earnings reaction to the recent Microsoft results. Investors are beginning to demand results from the investments for understandable reasons, driven by the lofty forecasts we’ve seen over the past several years.
Microsoft’s Intelligent Cloud segment, which includes Azure, saw sales grow 28% year-over-year to $32.9 billion throughout its latest period, though the segment’s gross margin took a hit due to continued AI investments.
Concerning Azure and cloud services revenue specifically, sales grew 31% year-over-year, reflecting a deceleration relative to recent growth rates of 35% and 39% across its previous two periods, respectively. For years, investors have placed a strong emphasis on accelerating cloud revenue, which has often dictated post-earnings reactions across the space, a key factor to keep in mind when targeting these stocks.
Bottom Line
Thematic investing has emerged as a powerful way for investors to sync their portfolios with emerging trends. A mix of long-term and short-term themes is increasingly dictating which companies lead as economies expand and markets shift.
While stocks in each theme aren't direct recommendations, they offer a solid starting point. Leverage the Zacks Rank and other metrics to identify the best stocks for your strategy. Each featured stock comes with a Zacks report, giving you the tools to analyze performance and potential.
The Cloud Computing thematic list, which currently Microsoft (MSFT - Free Report) is part of, focuses on technology companies that provide the related hardware and software to enable cloud computing services, the communication service providers that offer the network facilities and the various firms that utilize the services across diverse sectors like financial, consumer discretionary, and industrials.