Back to top

Image: Bigstock

Tech Giants Expand Cloud Business Amid Coronavirus: 4 Winners

Read MoreHide Full Article

Alibaba Group Holdings Limited (BABA - Free Report) on Jun 9 said that it plans to recruit around 5,000 staff globally in a bid to strengthen its cloud unit. The announcement comes in less than two months after the cloud computing company said that it would invest over $20 billion to build the next-generation datacenters.

Could business has been gaining popularity lately and the COVID-19 pandemic is making its importance felt further with many countries still under lockdown and more people working and learning from home. This has seen the world becoming cloud dependent and companies shifting data and information to technological and digital platforms to safely remain afloat.

Alibaba Aims Big

Alibaba is aiming to recruit 5,000 staff worldwide over the next 10 months, in areas including network, database, servers, chips and artificial intelligence, it said in a statement on Tuesday. This commitment for job creation follows the announcement in April that the cloud computing giant would invest additional $28 billion over the next three years to build the next-generation datacenters.

“In light of the fast-growing demand of digital shift from global clients in all sectors, we are continuing with our commitment to offering world-class cloud services. To move forward in full speed, we are not only building trusted cloud technologies and services, but also investing in worldwide IT talents who are pioneering the development of cutting-edge cloud and data intelligence technologies,” the company said. Alibaba Cloud has data centers in 63 availability zones across 21 regions, serving millions of customers across the globe. It has more than 70 security and compliance accreditations worldwide.

Cloud Services in Demand

Not only Alibaba, could services have become the focus for a large number of tech companies thanks to the ongoing pandemic. Last month, Microsoft Corp. (MSFT - Free Report) said that it will create its first datacenter in Italy under a $1.5 billion investment. Prior to that the tech giant had said that it would pump in $1 billion in Poland to create a datacenter and expand its cloud services there.

In April, Amazon.com, Inc. (AMZN - Free Report) also opened a datacenter region in Italy. A number of companies are expecting their cloud usage to exceed plans due to the impacts of the COVID-19 pandemic. According to the ninth-annual Flexera 2020 State of the Cloud Report, 59% of the companies expect their cloud usage to be slightly or significantly higher than planned.

Also, Zoom Video Communications, Inc.’s (ZM - Free Report) Zoom recently teamed up with Oracle Corporation (ORCL - Free Report) to expand its cloud business.Oracle has also been ramping up free online learning and certification courses amid lockdown. 

Our Choices

Tech companies have been aggressively expanding their cloud services, given that the coronavirus pandemic is far from over and many governments are still hesitant to lift lockdown or ease stay-at-home orders. Given the situation, we have shortlisted four tech companies that are sure to benefit from soaring demand for cloud services.

Zoom Video Communications, Inc.’s cloud-native unified communications platform, which combines video, audio, phone, screen sharing and chat functionalities, makes remote-working and collaboration easy. Undoubtedly, the company is benefiting from the work-from-home and online learning wave following the coronavirus pandemic outbreak that has forced more and more people to stay home.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 155.8% over the past 30 days. Zoom sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Atlassian Corporation Plc (TEAM - Free Report) is a global leader and innovator in the enterprise collaboration and workflow software space. The company offers a suite of cloud-based software solutions, which help organizations to collaborate and manage their workforce, such that the teams work better together.

The company’s expected earnings growth rate for the current year is 26.7%. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the past 30 days. Atlassian Corporation holds a Zacks Rank #2 (Buy).

Avalara, Inc.  is a provider of cloud-based tax compliance solutions. It offers businesses of all sizes achieve compliance with transaction taxes including sales and use, VAT, excise, communications and other tax types. 

The company’s expected earnings growth rate for the current year is 58.3%. The company’s shares have gained 3.2% over the past 30 days. Avalara carries a Zacks Rank #2.

Blackline, Inc. (BL - Free Report) is a provider of cloud-based solutions for Finance & Accounting, which centralize and streamline financial close operations and other key F&A processes for mid-size and large organizations.

The company’s expected earnings growth rate for the current year is 16.2%. The company’s shares have gained 17.3% over the past 30 days. BlacklineCorporation holds a Zacks Rank #2.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Published in