Cloud Computing Stocks in Vogue: 4 Picks to Swim With the Tide

Globe and Mail

2 days ago

An updated edition of the June 05, 2025 article.
Fueled by widespread adoption, cloud computing has generated a significant buzz across the length and breadth of the business enterprise ecosystem. Driving innovation and digital transformation by capitalizing on virtualization technology, it has enabled users to access and store data over the Internet without managing their physical servers and intricate IT infrastructure. This on-demand access to computing resources as services over the Internet ('the cloud' per se) has facilitated the development of cutting-edge technologies. Moreover, by enabling multiple users to share the same hardware resources by connecting to the cloud platform through a web browser or dedicated applications, cloud computing has created the framework for seamless omnichannel customer engagement at lower costs.
As cloud computing gains traction with greater flexibility and scalability, it has emerged as an attractive theme for investors seeking to invest in blue-chip tech firms. This has made cloud computing companies like Microsoft Corporation MSFT, Amazon.com, Inc. AMZN, International Business Machines Corporation IBM and Arista Networks Inc. ANET indispensable for any investment portfolio. But before digging deep into these prized possessions, let us delve a little more into why organizations are increasingly adopting cloud computing.
Cloud computing eliminates fixed capital expenses pertaining to the purchase of related hardware and software. It reduces the operating costs of maintaining onsite data centers and deploying IT experts to manage the infrastructure, making it highly cost-effective. Based on a pay-per-use pricing model, enterprises only pay for the computing resources they use. With easy access to a plethora of innovative technologies, it increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale. Moreover, cloud computing services are delivered over a highly secure network with low latency for applications and data backup facilities for improved reliability.
Cloud computing services fall into four broad categories, namely infrastructure as a service (IaaS), platform as a service (PaaS), serverless and software as a service (SaaS), offering different levels of control, flexibility and management options to business enterprises. Cloud computing, relying heavily on virtualization and automation technologies, provides the requisite infrastructure for AI (artificial intelligence) and machine learning (ML) workloads. It delivers powerful computing abilities to process and analyze data, creating an ideal platform for Big Data management.
Per Grand View Research, the global cloud computing market size is expected to swell to $2,390.2 billion by 2030 from $752.4 billion in 2024 at a CAGR of 20.4% with a variety of capabilities across multiple industries. These include better patient monitoring and outcomes in healthcare, personalized financial management and predictive spending, immersive learning in education, superior inventory management in retail and predictive maintenance and better supply chain management in the manufacturing sector.
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4 Cloud Computing Stocks to Keep an Eye on
Microsoft is one of the prominent public cloud providers that can deliver a wide variety of IaaS and PaaS solutions at scale. Microsoft Azure, its cloud computing platform, allows users to build, run and scale applications in the cloud. It offers a variety of services, including storage, networking, analytics and AI.
Microsoft has doubled down on the cloud computing opportunity. Azure's increased availability in more than 60 announced regions globally has strengthened Microsoft's competitive position in the cloud computing market. Operating through a vast network of global data centers that ensure high availability and reliability for applications, Azure offers seamless access to all the services included in the portal once customers subscribe to it. Subscribers can use these services to create cloud-based resources, such as virtual machines (VMs) and databases, which can then be assembled into running environments used to host workloads and store data.
As Microsoft continues to push the boundaries of networking technology, it aims to create innovative, resilient and secure solutions that enable businesses to leverage AI and the cloud to their fullest potential. It is heavily investing in AI-powered cloud services, integrating Azure OpenAI Service, Copilot and ML into various cloud solutions, making AI a central feature of Azure to empower organizations to manage their applications with greater confidence and efficiency. Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Amazon enjoys a dominant position in the cloud-computing market, particularly in the IaaS space, thanks to Amazon Web Services (AWS), which is one of its high-margin-generating businesses. The expanding customer base of AWS, driven by its strengthening cloud offerings, will continue to aid Amazon's dominance in the global cloud space.
AWS is the world's most comprehensive and broadly adopted on-demand cloud computing platform, offering more than 200 fully featured services from data centers globally. Millions of customers, including the fastest-growing startups, largest enterprises and leading government agencies, are using AWS to lower costs, become more agile and innovate faster. It reportedly offers the widest variety of databases that are purpose-built for different types of applications to enable subscribers to choose the right tool for the job.
Amazon aims to extend AWS' AI and ML capabilities to facilitate improved decision-making. This Zacks Rank #1 company intends to expand its global infrastructure for faster and more reliable service with low latency and maximum availability. From cloud-native applications and AI-driven solutions to edge computing and sustainability initiatives, AWS is likely to push the limits in the realm of cloud computing technology.
IBM has gradually evolved as a provider of cloud and data platforms. The Red Hat acquisition, in particular, has helped it strengthen its competitive position in the hybrid cloud market. With the buyout, the company offers a Linux operating system—Red Hat Enterprise Linux—and a hybrid cloud platform—Red Hat OpenShift—that aids enterprises with digital transformation.
With a surge in traditional cloud-native workloads and associated applications, along with a rise in generative AI deployment, there is a radical expansion in the number of cloud workloads that enterprises are currently managing. This has resulted in heterogeneous, dynamic and complex infrastructure strategies, which have led firms to undertake a cloud-agnostic and interoperable approach to highly secure multi-cloud management. This, in turn, has translated into a healthy demand for IBM hybrid cloud solutions. In addition, the buyout of HashiCorp has significantly augmented IBM's capabilities to assist enterprises in managing complex cloud environments. HashiCorp's tool sets complement IBM RedHat's portfolio, bringing additional functionalities for cloud infrastructure management and bolstering its hybrid multi-cloud approach.
IBM is poised to benefit from strong demand for hybrid cloud and AI, driving growth in the Software and Consulting segments. This Zacks Rank #2 company's growth is expected to be aided primarily by analytics, cloud computing and security in the long haul.
Arista provides cloud networking solutions for data centers and cloud computing environments. At the core of the company's cloud networking solutions is the Linux-based Extensible Operating System (EOS), which supports leading cloud and virtualization solutions, including Microsoft System Center, OpenStack and other cloud management frameworks.
In addition to high capacity and easy availability, its cloud networking solutions promise predictable performance, along with programmability that enables integration with third-party applications for network management, automation and orchestration. Arista provides routing and switching platforms with industry-leading capacity, low latency, port density and power efficiency. The company boasts a multi-domain modern software approach built upon a unique and differentiating foundation, the single EOS and CloudVision stack.
The versatility of Arista's unified software stack across various use cases, including WAN routing and campus and data center infrastructure, sets it apart from other competitors in the industry. With customers increasingly deploying transformative cloud networking solutions, the company has announced several additions to its multi-cloud and cloud-native software product family with CloudEOS Edge. This Zacks Rank #1 stock has introduced cognitive Wi-Fi software that delivers intelligent application identification, automated troubleshooting and location services.
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