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Cloud computing is a process in which data or software is stored outside a computer and can be accessed anywhere, at any time, via the Internet. This idea is effective as it helps firms lower IT costs by eliminating the need for servers and related maintenance costs.
Also, it provides greater accessibility. Since everything is on the Internet, users can access any data or document at any moment. Needless to say, such advantages make it a thing of tomorrow.
Global investment in cloud services has increased by leaps and bounds in recent years. Cloud stocks, particularly those tied to artificial intelligence (AI) infrastructure like AWS, Azure, and Google Cloud, have risen massively in price in the recent past.
Growth in Cloud Infrastructure
The widespread adoption of remote connectivity continues to fuel the need for scalable and reliable cloud solutions. Moreover, advancements in cloud technologies, including AI, machine learning (ML) and cybersecurity enhancements, have expanded the use cases for cloud services.
In second-quarter 2026, global cloud infrastructure service spending grew to $143.4 billion (an increase of more than $43 billion from second-quarter 2025), marking the highest growth rate in eight years, per Synergy Research.
Despite its massive size, the cloud market continues to grow, with year-over-year growth accelerating for 11 straight quarters. Fueled by AI demand, growth hit its highest level since 2021, per Statista. Going forward, cloud infrastructure service revenues are on track to top $500 billion for the first time in 2026, per data provided by Statista.
Goldman Sachs expects the trend of accelerating cloud revenue growth to continue this quarter, with year-over-year growth increasing from 48% in the second quarter to 55% in the third quarter, as quoted on Yahoo Finance.
AI Keeps Cloud Stocks Resilient
Major cloud providers often hold up better during market pullbacks, geopolitical tensions and economic slowdowns. AI is increasingly being seen as essential infrastructure, supporting continued demand for data centers, computing power and cloud services. These are now viewed as fundamental assets required for future economic competitiveness.
Worldwide AI-optimized infrastructure as a service (IaaS) spending is projected to grow 96% in 2026, reaching $42.3 billion, according to Gartner. The spending is expected to grow 56.5% to $66.1 billion in 2027.
According to the International Data Corporation (IDC), cloud infrastructure spending continues to surge, driven heavily by enterprise AI adoption and data center expansion. Global AI infrastructure spending alone is forecast to reach $497 billion, while total public cloud spending is on track to surpass $1 trillion, as quoted on W. Media.
IDC predicts spending on cloud infrastructure to record a compound annual growth rate (CAGR) of 14.3% over the 2023-2028 forecast period, reaching $213.7 billion in 2028 and accounting for 75% of total compute and storage infrastructure spend.
Inside Market Share
Global enterprise spending on cloud infrastructure services reached $143 billion in second-quarter 2026, up $43 billion year over year, per Synergy, as quoted on CRN. AWS remains the cloud infrastructure leader, with a 28% global market share in the first quarter of 2026, ahead of Microsoft Azure at 20% and Google Cloud at 15%. Together, the “Big Three” control more than 60% of the market.
Neocloud Expands the AI Infrastructure Market
Neocloud refers to a specialized segment of cloud computing that provides high-performance, AI-focused infrastructure, including powerful GPUs, to businesses through the cloud. It offers flexible and scalable computing for AI training, inference and other demanding workloads without requiring companies to build and maintain costly infrastructure.
Neocloud providers normally lock in multi-year compute contracts, generating a steadier, more predictable revenue stream than the on-demand model of traditional cloud. Companies such as CoreWeave and Nebius are expanding capacity and stand to benefit from this model.
Neocloud revenues are growing over 200% year over year. The broader neocloud market is projected to expand at an average annual growth rate of roughly 58% through 2031, rising toward a market size of $400 billion, according to Synergy Research.
ETFs in Focus
Against this backdrop, we have highlighted a few cloud computing ETFs that could stand to gain in the coming days.
The underlying ISE Cloud Computing Index is a modified market capitalization-weighted index designed to track the performance of companies actively involved in the cloud computing industry. The $3.46-billion-asset fund charges 60 bps in fees.
Everpure (5.51%), DigitalOcean (3.92%) and Nutanix (3.57%) are the three top holdings of the fund. Software (44.78%), IT Services (24.37%) and Technology Hardware, Storage & Peripherals (11.96%) are the three top industries of the fund.
The underlying BVP Nasdaq Emerging Cloud Index is an equally weighted Index, designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers. The fund has an asset base of $291.3 million and charges 45 bps in fees. No stock makes up more than 1.94% of the fund.
The underlying Indxx Global Cloud Computing Index provides exposure to exchange-listed companies in developed and emerging markets that are positioned to benefit from the increased adoption of cloud computing technology.
The fund has an asset base of $398.5 million and charges 68 bps in fees. Snowflake (7.31%), Paycom Software (5.41%) and Datadog Class-A (4.77%) hold the top three spots in the fund.
The underlying Fidelity Cloud Computing Index reflects the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet.
The fund has an asset base of $153.1 million and it charges 39 bps in fees. Microsoft (4.95%), Snowflake (4.54%) and Salesforce (4.40%) are the top three companies in the fund.
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Image: Bigstock
A Guide to Cloud Computing ETF Investing
Cloud computing is a process in which data or software is stored outside a computer and can be accessed anywhere, at any time, via the Internet. This idea is effective as it helps firms lower IT costs by eliminating the need for servers and related maintenance costs.
Also, it provides greater accessibility. Since everything is on the Internet, users can access any data or document at any moment. Needless to say, such advantages make it a thing of tomorrow.
Global investment in cloud services has increased by leaps and bounds in recent years. Cloud stocks, particularly those tied to artificial intelligence (AI) infrastructure like AWS, Azure, and Google Cloud, have risen massively in price in the recent past.
Growth in Cloud Infrastructure
The widespread adoption of remote connectivity continues to fuel the need for scalable and reliable cloud solutions. Moreover, advancements in cloud technologies, including AI, machine learning (ML) and cybersecurity enhancements, have expanded the use cases for cloud services.
In second-quarter 2026, global cloud infrastructure service spending grew to $143.4 billion (an increase of more than $43 billion from second-quarter 2025), marking the highest growth rate in eight years, per Synergy Research.
Despite its massive size, the cloud market continues to grow, with year-over-year growth accelerating for 11 straight quarters. Fueled by AI demand, growth hit its highest level since 2021, per Statista. Going forward, cloud infrastructure service revenues are on track to top $500 billion for the first time in 2026, per data provided by Statista.
Goldman Sachs expects the trend of accelerating cloud revenue growth to continue this quarter, with year-over-year growth increasing from 48% in the second quarter to 55% in the third quarter, as quoted on Yahoo Finance.
AI Keeps Cloud Stocks Resilient
Major cloud providers often hold up better during market pullbacks, geopolitical tensions and economic slowdowns. AI is increasingly being seen as essential infrastructure, supporting continued demand for data centers, computing power and cloud services. These are now viewed as fundamental assets required for future economic competitiveness.
Worldwide AI-optimized infrastructure as a service (IaaS) spending is projected to grow 96% in 2026, reaching $42.3 billion, according to Gartner. The spending is expected to grow 56.5% to $66.1 billion in 2027.
According to the International Data Corporation (IDC), cloud infrastructure spending continues to surge, driven heavily by enterprise AI adoption and data center expansion. Global AI infrastructure spending alone is forecast to reach $497 billion, while total public cloud spending is on track to surpass $1 trillion, as quoted on W. Media.
IDC predicts spending on cloud infrastructure to record a compound annual growth rate (CAGR) of 14.3% over the 2023-2028 forecast period, reaching $213.7 billion in 2028 and accounting for 75% of total compute and storage infrastructure spend.
Inside Market Share
Global enterprise spending on cloud infrastructure services reached $143 billion in second-quarter 2026, up $43 billion year over year, per Synergy, as quoted on CRN. AWS remains the cloud infrastructure leader, with a 28% global market share in the first quarter of 2026, ahead of Microsoft Azure at 20% and Google Cloud at 15%. Together, the “Big Three” control more than 60% of the market.
Neocloud Expands the AI Infrastructure Market
Neocloud refers to a specialized segment of cloud computing that provides high-performance, AI-focused infrastructure, including powerful GPUs, to businesses through the cloud. It offers flexible and scalable computing for AI training, inference and other demanding workloads without requiring companies to build and maintain costly infrastructure.
Neocloud providers normally lock in multi-year compute contracts, generating a steadier, more predictable revenue stream than the on-demand model of traditional cloud. Companies such as CoreWeave and Nebius are expanding capacity and stand to benefit from this model.
Neocloud revenues are growing over 200% year over year. The broader neocloud market is projected to expand at an average annual growth rate of roughly 58% through 2031, rising toward a market size of $400 billion, according to Synergy Research.
ETFs in Focus
Against this backdrop, we have highlighted a few cloud computing ETFs that could stand to gain in the coming days.
First Trust Cloud Computing ETF (SKYY - Free Report)
The underlying ISE Cloud Computing Index is a modified market capitalization-weighted index designed to track the performance of companies actively involved in the cloud computing industry. The $3.46-billion-asset fund charges 60 bps in fees.
Everpure (5.51%), DigitalOcean (3.92%) and Nutanix (3.57%) are the three top holdings of the fund. Software (44.78%), IT Services (24.37%) and Technology Hardware, Storage & Peripherals (11.96%) are the three top industries of the fund.
WisdomTree Cloud Computing ETF (WCLD - Free Report)
The underlying BVP Nasdaq Emerging Cloud Index is an equally weighted Index, designed to measure the performance of emerging public companies focused on delivering cloud-based software to customers. The fund has an asset base of $291.3 million and charges 45 bps in fees. No stock makes up more than 1.94% of the fund.
Global X Cloud Computing ETF (CLOU - Free Report)
The underlying Indxx Global Cloud Computing Index provides exposure to exchange-listed companies in developed and emerging markets that are positioned to benefit from the increased adoption of cloud computing technology.
The fund has an asset base of $398.5 million and charges 68 bps in fees. Snowflake (7.31%), Paycom Software (5.41%) and Datadog Class-A (4.77%) hold the top three spots in the fund.
Fidelity Cloud Computing ETF (FCLD - Free Report)
The underlying Fidelity Cloud Computing Index reflects the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet.
The fund has an asset base of $153.1 million and it charges 39 bps in fees. Microsoft (4.95%), Snowflake (4.54%) and Salesforce (4.40%) are the top three companies in the fund.