5 Best Cloud Computing Stocks Heading into 2024

In this article, we will be taking a look at the 5 best cloud computing stocks heading into 2024. To read our detailed analysis of the cloud computing industry, you can go directly to see the 15 Best Cloud Computing Stocks Heading into 2024.

5. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 112

Alibaba Group Holding Limited (NYSE:BABA) is a broad-line retail company based in China. Its cloud segment provides scalable, secure, and reliable cloud computing services globally.

Shyam Patil at Susquehanna reiterated a Positive rating and a $160 price target on Alibaba Group Holding Limited (NYSE:BABA) on August 31.

There were 112 hedge funds long Alibaba Group Holding Limited (NYSE:BABA) in the second quarter, with a total stake value of $4.1 billion.

L1 Capital said the following about Alibaba Group Holding Limited (NYSE:BABA) in its second-quarter 2023 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) (Long -18%) shares weakened in recent months as Chinese reopening strength faded and macro-economic datapoints began sequentially declining. Nevertheless, we believe the Chinese government will use consumption as a key lever to reinvigorate the economy post-COVID lockdowns. Alibaba remains a high-quality business with leading positions in both eCommerce and Public Cloud, and management is taking proactive steps to unlock shareholder value. It has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media, and Entertainment Group. Each group will be managed independently, with a separate CEO and board, have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this restructure will be a strong positive catalyst to unlock the sum-of-the-parts valuation upside in the company.”

4. salesforce.com, inc. (NYSE:CRM)

Number of Hedge Fund Holders: 122

On September 21, Patrick Walravens at JMP Securities reiterated a Market Outperform rating on salesforce.com, inc. (NYSE:CRM) alongside a $275 price target.

Based in San Francisco, California, salesforce.com, inc. (NYSE:CRM) is a cloud-based software company. It provides customer relationship management technology, among more.

We saw 122 hedge funds long salesforce.com, inc. (NYSE:CRM) in the second quarter, with a total stake value of $7.2 billion.

This is what Harding Loevner said about salesforce.com, inc. (NYSE:CRM) in its second-quarter 2023 investor letter:

“Salesforce, Inc. (NYSE:CRM), a company we’ve owned since 2019, recently added ChatGPT-like capabilities onto its existing Al module, Einstein, to support its internal sales efforts and customer-facing software. For example, Einstein GPT can help generate marketing emails tailored to specific clients by using Salesforce’s customer database and past email correspondence to learn the most effective approach for each client. Einstein GPT is also different from off-the-shelf LLMS in three important ways: It keeps personal identifiable information private and secure, compared with external tools that retain anything a user enters. It employs the latest data in Salesforce’s system, as opposed to the sometimes-stale public data that train generic models. And generative Al capabilities can be integrated with other Salesforce offerings; the company has already introduced Slack GPT and Tableau GPT, Al-equipped versions of its workplace collaboration and analytics tools.”

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 152

Alphabet Inc. (NASDAQ:GOOG) had 152 hedge funds long its stock in the second quarter, with a total stake value of $18.9 billion.

Alphabet Inc. (NASDAQ:GOOG) is a big tech company based in Mountain View, California. It offers the Google Cloud as part of its cloud computing services which offers infrastructure, cybersecurity, data, analytics, and other services.

John Blackledge at TD Cowen maintains an Outperform rating and a $140 price target on Alphabet Inc. (NASDAQ:GOOG) as of July 13.

Here’s what Artisan Partners said about Alphabet Inc. (NASDAQ:GOOG) in its second-quarter 2023 investor letter:

“Our best performing stocks this quarter were Meta, Alphabet Inc. (NASDAQ:GOOG) and Heidelberg Materials. The rise in Alphabet’s share performance was primarily driven by the AI frenzy. Earlier this year, there were some doubts about Alphabet’s ability to compete with OpenAI’s ChatGPT product. This was a bit ironic since Alphabet has been using AI technology to improve its Google search results and advertising business for years. Indeed, the technology that underpins OpenAI’s ChatGPT actually came from Alphabet more than five years ago. But sometimes the market needs a reminder, and Alphabet provided tangible evidence of its capabilities. At a recent developer conference, it launched Bard, a consumer-oriented generative AI version of its search engine, as well as several other concrete examples of how AI could improve its current business. As with Meta, the long-term implications of AI on Alphabet’s business model are still far from certain. But we do believe that it is a technology leader in this field and will participate in whatever direction the technology develops.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 278

Amazon.com, Inc. (NASDAQ:AMZN) is another big tech company on our list. It offers Amazon Web Services as a leading cloud computing business to customers worldwide.

A total of 278 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter. Their total stake value was $34.9 billion.

Scott Devitt at Wedbush reiterated an Outperform rating and a $180 price target on Amazon.com, Inc. (NASDAQ:AMZN) on September 28.

Diamond Hill Capital said the following about Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2023 investor letter:

“Among our top contributors were insurance company American International Group (AIG), auto retailer CarMax and global online retailer Amazon.com, Inc. (NASDAQ:AMZN).

Amazon’s management team has been working to improve retail profitability, and Q1 results showed progress. In the case of Amazon’s web services (AWS), the market has shifted its focus from where growth will bottom in the near term to how AI can help accelerate the adoption of public cloud services in the future. We believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow faster than the overall economy in the coming years.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 300

Citigroup’s Tyler Radke reiterated a Buy rating and a $420 price target on Microsoft Corporation (NASDAQ:MSFT) on September 22.

Microsoft Corporation (NASDAQ:MSFT) was seen in the portfolios of 300 hedge funds in the second quarter. Their total stake value was $69.8 billion.

Yet another big tech giant, Microsoft Corporation (NASDAQ:MSFT) is a systems software company. Its Intelligent Cloud segment provides its cloud computing products and services such as Microsoft Azure.

ClearBridge Investments mentioned Microsoft Corporation (NASDAQ:MSFT) in its second-quarter 2023 investor letter:

“We initiated a small position in Microsoft Corporation (NASDAQ:MSFT) during the quarter, which may seem surprising given our concerns about index concentration. However, we seized the opportunity on a compelling entry point below our business value estimate, due to an anticipated acceleration of demand for Microsoft’s Azure cloud business and incremental revenues from integration of Microsoft’s AI Copilot program into its office platform. We believe this could support double-digit growth, while simultaneously solidifying Microsoft’s competitive position as an AI winner. Even as a small position, we believe Microsoft provides a large portfolio construction benefit given low correlation to the rest of the portfolio.”

See also 10 Cloud Computing Stocks Under $5 and 12 Biggest Cloud Providers by Market Share.