We have identified the best cloud computing stocks to buy under $10 that offer strong growth potential.
Cloud computing refers to delivering computing services—such as servers, storage, databases, networking, software, and analytics—over the Internet (the “cloud”). It means businesses and individuals can access these resources on demand instead of owning and maintaining physical servers and infrastructure, paying only for what they use. This article looks at a broader definition of cloud computing, not just cloud infrastructure companies. These include companies delivering products via the cloud, including the “as-a-service” model, such as software-as-a-service (SaaS), Infrastructure-as-a-service (IaaS), Platform-as-a-service (PaaS), cloud-native applications, or platforms and services running on the cloud.
The cloud computing industry has grown impressively over the years because of its cost-effectiveness, its ability to provide unlimited scalability, and the increased speed of digital transformation. Simply put, digital transformation and adopting new technologies have become crucial to survival and competitiveness in the current market environment, which leads to higher demand for cloud computing services. Even smaller firms can now afford to adopt new technologies with the help of cloud services. This allows them to become agile and well-equipped to compete and adapt to changing market dynamics.
However, this technology still has a long growth trajectory ahead of it, as highlighted by Gartner in its latest report on this topic. In this report, Gartner had projected that 90% of organisations will adopt hybrid cloud by 2027. The research firm also forecasted that worldwide end-user spending on public cloud services will reach around $723 billion in 2025 from $596 billion in 2024. Of the total, IaaS and PaaS segments are expected to grow the fastest, with an increase of 25% and 21.6%, respectively. While these two segments are growing faster, SaaS is expected to remain the largest segment, contributing around 41% of the total spending.
On CNBC’s Closing Bell Overtime program some months ago, Goldman Sachs’s managing director Eric Sheridan discussed AI and cloud computing, among other topics. He noted that the cloud computing sector remains robust and is further strengthened by the increasing deployment of AI technologies. Additionally, businesses are increasingly looking to integrate AI into their workflow to improve productivity and efficiency. In addition, he said that the industry is still looking for that “killer application” for AI, which essentially means a use case that could have a sizeable transformative effect on industries or lives using AI. Adding to his views, Eric also highlighted that while AI’s benefits are visible in the short term, long-term impacts and benefits are yet to become visible. Overall, this discussion indicated robust growth in cloud computing in the coming years.
With these insights, let’s explore our selection of the 10 best cloud computing stocks to buy under $10.
A team of software engineers at desks working on code for a cutting-edge cloud computing solution.
Our Methodology
To identify the best cloud computing stocks to buy under $10, we first compiled a list of cloud computing stocks using screeners, ETFs and financial media reports. We then screened for stocks trading below $10, with a market capitalisation of at least $300 million, and a potential upside greater than 10%. We identified the top 10 stocks with the highest hedge fund ownership from this refined list by leveraging data from Insider Monkey’s Q4 2024 hedge fund database. Finally, we ranked these stocks in ascending order based on the number of hedge funds holding positions in them.
Note: All pricing data is as of market close on March 28.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Cloud Computing Stocks to Buy Under $10
10. PubMatic Inc. (NASDAQ:PUBM)
Current Share Price: $9.28
Number of Hedge Fund Holders: 17
PubMatic Inc. (NASDAQ:PUBM) provides a technology platform that digital content publishers and app developers use to maximise advertising revenue. The company offers a cloud-based infrastructure customised for real-time programmatic advertising. It enables publishers to automate and optimise the sale of digital ad inventory across various formats, such as display, video, mobile, and connected TV (CTV).
PubMatic is well-positioned to benefit from the rapid growth of digital media, the need for specialised infrastructure to manage increasing complexity in the digital advertising market, and the continued rise in online consumer engagement. Its platform differentiates using data, artificial intelligence, and machine learning to boost ad yield and improve client monetisation results.
Following the Q4 2024 results, PubMatic’s co-founder and CEO, Rajeev Goel, emphasised the company’s strong fundamentals, noting:
“Today, our omnichannel platform serves publishers, media buyers, commerce media networks, and curation/data providers, all of which are turning to sell-side technology for critical end-to-end solutions needed to build their ad businesses. As we look to 2025, we expect accelerated growth in our underlying business as ad buyers seek premium, brand-safe, curated inventory in the open internet.”
Despite slightly softer Q4 results and Q1 guidance, Evercore ISI analyst Robert Coolbrith maintained a Buy rating on PubMatic Inc. (NASDAQ:PUBM) with a $16 price target.
9. Lightspeed Commerce Inc. (NYSE:LSPD)
Current Share Price: $9.09
Number of Hedge Fund Holders: 18
Lightspeed Commerce Inc. (NYSE:LSPD) is a Canada-based provider of cloud-based e-commerce and point-of-sale (POS) solutions for small and medium-sized businesses globally. The company offers an integrated platform enabling retailers, restaurants, and hospitality businesses to manage operations, process payments, engage customers, and drive online and offline revenue.
Over the last three years (FY 2022-25), Lightspeed Commerce Inc. (NYSE:LSPD) grew revenue at a solid compounded annual growth rate (CAGR) of 30%. To accelerate growth in the coming years, the company focuses on complex, more significant, higher Gross Transaction Volume (GTV) customers, product innovation and footprint expansion. The company has a considerable growth potential with its North American (NoAM) retail market addressable market opportunity standing at a massive $74 billion over the coming years. Not this large, but the EMEA hospitality opportunity also stands at a healthy $5 billion.
With growth momentum in place, the company gave healthy guidance at its investor day on March 26. It expects to grow customer locations (billing merchant) in the NoAM and EMEA businesses at a CAGR of 10%-15% between 2025 and 2028. In the same period, gross profit is expected to grow at a CAGR of 20%-25%. For the overall business, gross profit is expected to reach $700 million by 2028, implying a growth of 15%-18%.
Before the investor day, an RBC Capital analyst had reiterated an Outperform rating on the shares. However, he lowered his price target to $15 from $20 after the company reduced its FY 2025 revenue growth guidance.
