In this article, we will discuss the 8 Cloud Computing Stocks Under $10.
As per Nasscom Community, the cloud computing market saw a staggering growth in 2024, touching $1.2 trillion. This market was aided by significant demand for scalable, efficient, and cost-effective digital solutions. Some of the critical growth drivers include the proliferation of remote work, acceleration in digital transformation initiatives, and robust adoption of IoT devices.
AI To Drive Growth in Cloud Computing
Over the past few years, cloud computing has merged with Al and redefined business operations throughout industries. As per Industry experts, cloud strategies have been shifting as organizations continue to utilize more services and Al is expected to be one of the biggest drivers. John Samuel, global CIO, and EVP at a global IT and outsourcing provider, believes that cloud providers have invested significantly in GenAl technologies and are collaborating with chip manufacturers to enhance performance and scalability.
According to Samuel, these alliances should enable cloud platforms to power a growing ecosystem of downstream SaaS providers that build solutions to allow easier adoption of Al-based solutions. Therefore, GenAl continues to be a key enabler for adopting advanced Al capabilities throughout industries, with the cloud acting as the backbone.
As per Alex Turgeon, President of Valere, Al is expected to drive ~35% of the cloud computing market’s growth over the upcoming 2 years. In 2025, Al and cloud computing are expected to form an inseparable partnership. Alex Turgeon believes that investments by companies in Al-enabled cloud infrastructure should enhance scalability, performance, and accessibility. As per Deloitte, 70% of the companies that are adopting Al will adopt it via cloud-based infrastructure.
Key Cloud Computing Trends for 2025
According to Nasscom Community, future developments in the cloud computing field are expected to be aided by multi-cloud strategies. This will involve the use of more than one cloud service provider between the business and the cloud altogether. By 2025, different cloud networks can communicate, which will result in more interoperability between different cloud platforms. By next year, companies are expected to focus on green cloud initiatives. Therefore, cloud solution sustainability with respect to infrastructure is expected to become a major trend by 2025.
Well-established cloud service providers continue to focus on cutting their global emissions as they tap the green data centers making use of renewable energy such as wind and solar installations. While some leading technology firms use renewable energy sources in their data centers, others have committed to achieving carbon negativity by the year 2030. Nasscom Community went on to add that firms will look for cloud service providers that have solid sustainable solutions, such as carbon neutrality in computing strategies on corporate responsibility programs.
Amidst these trends, let us now have a look at the 8 Cloud Computing Stocks Under $10
A close up view of a laptop computer, the cloud computing platform displayed on the screen.
Our Methodology
To list the 8 Cloud Computing Stocks Under $10, we used a screener and online rankings to extract the list of companies belonging to the cloud computing industry. After getting an initial list of 20-25 stocks, we filtered out the ones trading below $10. Finally, the stocks were ranked in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Cloud Computing Stocks Under $10
8) Kingsoft Cloud Holdings Limited (NASDAQ:KC)
Share Price as of November 26: $5.97
Number of Hedge Fund Holders: 5
Kingsoft Cloud Holdings Limited (NASDAQ:KC) provides a range of cloud services primarily in China. These services include IaaS, PaaS, and SaaS solutions. The company released its Q3 2024 results; wherein, its revenues went up by 16% YoY, led by high-quality business, such as AI. Kingsoft Cloud Holdings Limited (NASDAQ:KC)’s Chief Executive added that the AI business expanded to RMB362 million, making up ~31% of public cloud revenue. Over the previous 5 consecutive quarters, AI revenue demonstrated triple-digit YoY growth.
In Q3 2024, Kingsoft Cloud Holdings Limited (NASDAQ:KC) saw a whopping 6.9-fold increase compared to last year, surpassing the industry’s growth. Furthermore, the expansion of AI revenues and efficient cost-control measures aided its gross margins.
Wall Street remains optimistic about Xiaomi and the Kingsoft Ecosystem. Kingsoft Cloud Holdings Limited (NASDAQ:KC)’s ecosystem benefits from Xiaomi’s EV ventures via strategic collaborations that integrate cloud computing and AI technologies into Xiaomi’s growing smart ecosystem. Xiaomi’s EV strategy leverages advanced technologies, including AI-driven autonomous driving systems and smart cabin features. These require robust cloud and AI infrastructure- areas where Kingsoft Cloud Holdings Limited (NASDAQ:KC) has expertise.
This should further fuel Kingsoft Cloud Holdings Limited (NASDAQ:KC)’s top line by creating new opportunities to expand the services in high-value verticals such as EVs. Also, it further embeds itself in Xiaomi’s broader ecosystem. As per Wall Street, the shares of Kingsoft Cloud Holdings Limited (NASDAQ:KC) have an average price target of $41.83.
7) Rumble Inc. (NASDAQ:RUM)
Share Price as of November 26: $7.04
Number of Hedge Fund Holders: 6
Rumble Inc. (NASDAQ:RUM) operates an online video network platform. The company also offers cloud infrastructure solutions, including hosting capabilities for other companies. Rumble Cloud is a cloud infrastructure that provides a range of cloud-based solutions like virtual machines, and virtual private cloud services, among others.
Rumble Cloud competes with renowned cloud infrastructure companies such as Amazon and Microsoft. However, Rumble Inc. (NASDAQ:RUM)’s commitment to a free and open internet should continue to act as a competitive edge. Rumble Cloud continues to grow and has been gaining traction. On October 15, the company announced that online retailer, Sticker Mule, will become its client. As a part of this agreement, the retailer plans to move its Al processing to the Rumble Cloud, utilizing Rumble Inc. (NASDAQ:RUM)’s existing Nvidia H100 inventory to run its workloads.
Because of this new win, Wall Street analysts believe that the company might establish a significant revenue stream that will complement its video-sharing platform. In August, Rumble Inc. (NASDAQ:RUM) also announced that the Miami Dolphins had added Rumble Cloud to its infrastructure. This further validates the company’s cloud infrastructure offering and highlights its scaling initiatives.
Industry experts opine that its cost-effective, high-performing cloud services business should be the key driver to attract some large enterprise and government clients.
6) Upland Software, Inc. (NASDAQ:UPLD)
Share Price as of November 26: $3.87
Number of Hedge Fund Holders: 10
Upland Software, Inc. (NASDAQ:UPLD) offers cloud-based software applications that enable its customers to drive digital transformation. The company derives its subscription revenue from fees paid by the customers for using its cloud-based applications. In Q3 2024, Upland Software, Inc. (NASDAQ:UPLD)’s subscription and support revenues comprised 96% of the total revenues. The company welcomed 122 new customers in the quarter, including 18 new major customers. It expanded relationships with 312 existing customers, 27 of which were major expansions. These new and expanded relationships were seen throughout its portfolio.
For Q4 2024, Upland Software, Inc. (NASDAQ:UPLD) expects adjusted EBITDA in the range of $13.4 million and $16.4 million, for an adjusted EBITDA margin of 22% at the midpoint. This Adjusted EBITDA guide at the midpoint reflects an increase of 6% YoY. The annual costs will continue to decrease as Upland Software, Inc. (NASDAQ:UPLD) targets increased EBITDA. Moreover, investments in customer success should continue to drive higher renewal rates and product utilization.
The company announced the availability of Upland BA Insight for Microsoft Azure AI Search in the Microsoft Azure Marketplace. Upland BA Insight’s AI-powered content search brings intelligent search capabilities to the everyday hunt for relevant results. This aligns with a broader push to enhance the Upland Software, Inc. (NASDAQ:UPLD)’s product suite’s relevance in modern enterprise environments. The company’s acquisition strategy remains key to its growth as it targets businesses with established cloud-native products and significant client bases. Upland Software, Inc. (NASDAQ:UPLD)’s acquisition of Qvidian Corporation and RO Innovation strengthens its sales productivity portfolio.
While Qvidian supports RFP response automation, RO Innovation emphasizes customer reference management. The average 12-month price target on the shares of Upland Software, Inc. (NASDAQ:UPLD) is $5.00, as per Wall Street.
5) Rackspace Technology, Inc. (NASDAQ:RXT)
Share Price as of November 26: $2.64
Number of Hedge Fund Holders: 13
Rackspace Technology, Inc. (NASDAQ:RXT) is a provider of end-to-end multi-cloud technology services. The company designs, builds, and operates its customers’ cloud environments across technology platforms. It helps businesses optimize their use of cloud technologies. While Rackspace Technology, Inc. (NASDAQ:RXT) expects a 30% YoY revenue growth in its healthcare Private Cloud business for fiscal 2024, analysts are optimistic about a significant milestone in this business as the company saw a major healthcare provider migration. The company announced deploying an Epic Electronic Health Record (EHR) system for AdventHealth on its Healthcare Cloud platform.
To be precise, Rackspace Technology, Inc. (NASDAQ:RXT) is fully hosting and managing the Epic environment and 9 other strategic applications in the AdventHealth IT portfolio. This development indicates that the company remains focused on the healthcare and BFSI sectors. Also, it expects these verticals to account for one-third of total revenue by fiscal 2024. This means that it is targeting a service-led approach.
Rackspace Technology, Inc. (NASDAQ:RXT) continues to grow its service offerings, like its launch of GPU-as-a-service powered by Nvidia. This initiative aims to address the increased demand for high-performance computing resources, which remains important as cloud services continue to evolve and more industries decide to go for specialized infrastructure. As per Wall Street analysts, the shares of Rackspace Technology, Inc. (NASDAQ:RXT) have an average price target of $2.89.
4) Fastly, Inc. (NYSE:FSLY)
Share Price as of November 26: $7.95
Number of Hedge Fund Holders: 14
Fastly, Inc. (NYSE:FSLY) is a cloud computing services provider specializing in content delivery networks (CDNs), edge computing, and internet security solutions. It allows its customers to run custom applications directly on its edge servers, enabling them to perform complex tasks like personalization and data analysis.
Wall Street believes that the company is well-placed for sustainable growth in 2025. With the company’s competitor going bankrupt (Edgio), experts believe that Fastly, Inc. (NYSE:FSLY) should see growth over the upcoming quarters. The company’s Chief Executive has also highlighted that some accounts have shifted traffic towards Fastly, Inc. (NYSE:FSLY). This was seen primarily in overlapping accounts where the transition was straightforward.
Oppenheimer believes that Fastly, Inc. (NYSE:FSLY) should be the biggest beneficiary of this shutdown. While Akamai announced that it is the winning bidder to acquire select assets from Edgio, analysts believe that Fastly, Inc. (NYSE:FSLY) can capture a chunk of other customers or ~$20 million – $60 million of incremental revenue run rate. As a result of the shutdown, the industry has been consolidated into 3 players, with Fastly the premium one, as per Oppenheimer.
In Q3 2024, the company’s top 10 customers made 33% of revenue as compared to 40% in Q3 2023. The acceleration in growth outside the top 10 was stronger than expected and Fastly, Inc. (NYSE:FSLY) believes this growth to be sustainable. The company targets to bring the top 10 concentration to 30%.
3) Yext, Inc. (NYSE:YEXT)
Share Price as of November 26: $8.33
Number of Hedge Fund Holders: 20
Yext, Inc. (NYSE:YEXT) is a technology company that specializes in digital knowledge management and search solutions. It operates the Yext platform, which is a cloud-based platform allowing its customers to provide answers to consumer questions, control the facts about their businesses and the content of their landing pages, and manage their consumer reviews.
Wall Street analysts remain optimistic about Yext, Inc. (NYSE:YEXT)’s acquisition of Hearsay Systems. With Hearsay Systems now part of Yext, Inc. (NYSE:YEXT), the latter is well-positioned to accelerate innovation, provide unparalleled solutions, and drive growth for its customers.
Yext, Inc. (NYSE:YEXT) remains focused on opportunities for upselling within Hearsay’s customer base and exploring revenue synergies and cost efficiencies following the integration. Also, Yext is adapting to market dynamics as it shifts to usage-based pricing on the third-party reseller side and is committed to creating long-term value, further strengthening its position as a cloud-based platform. The usage-based pricing means that resellers of the company’s services will be charged based on how much of a particular service or resource their end clients use, instead of a fixed subscription or flat-rate fee. The usage-based pricing will give Yext, Inc. (NYSE:YEXT) a competitive edge.
As the only end-to-end digital presence platform in the market, Yext, Inc. (NYSE:YEXT) remains uniquely positioned to leverage its combined capabilities to accelerate the pace of innovation and deliver additional value.
Yext, Inc. (NYSE:YEXT) announced the launch of Yext Social, which is a major expansion of the Yext platform. Yext Social expands its product portfolio, offering an AI-powered social media management solution supporting multi-location brands in managing their digital presence throughout social channels. This addition further strengthens Yext, Inc. (NYSE:YEXT)’s position in the cloud-based industry.
2) Sprinklr, Inc. (NYSE:CXM)
Share Price as of November 26: $8.18
Number of Hedge Fund Holders: 24
Sprinklr, Inc. (NYSE:CXM) offers enterprise cloud software products worldwide. It operates the Unified Customer Experience Management platform, a software enabling customer-facing teams to collaborate throughout internal silos, communicate across digital channels, and leverage a complete suite of capabilities to deliver customer experiences.
Sprinklr, Inc. (NYSE:CXM)’s product portfolio, which includes unified customer experience management (Unified-CXM) solutions, places it well to capitalize on increasing demand for integrated customer engagement platforms. Sprinklr, Inc. (NYSE:CXM)’s ability to offer cloud-oriented AI-powered insights throughout various customer touchpoints should act as a key differentiator in a competitive landscape.
Despite the challenging environment, Sprinklr, Inc. (NYSE:CXM) continues to add new customers, such as UBS, Ford, T-Mobile, Grupo Bimbo, and Planet Fitness. The company has 145 customers contributing $1 million or more in subscription revenue, reflecting a rise of 21% YoY. Given its focus on targeting large enterprises, Sprinklr, Inc. (NYSE:CXM) provides premium-priced, customizable solutions that generate recurring revenue via subscription models. This strategy should continue to help it build a robust client base.
The company has been enhancing its offerings in the Contact Center-as-a-Service (CCaaS) space, a rapidly growing sector. CCaaS is a part of its unified CXM platform, that integrates contact center functionality with broader customer engagement capabilities. It continues to invest in its CCaaS delivery capabilities considering the growth opportunities in this market. Sprinklr, Inc. (NYSE:CXM) expects services gross margins to decline in Q3 2025 to approximately negative 15%. As it gains scale in CCaaS, it will focus on billing rates and utilization, improving services gross margins.
1) Alight, Inc. (NYSE:ALIT)
Share Price as of November 26: $8.02
Number of Hedge Fund Holders: 40
Alight, Inc. (NYSE:ALIT) is a leading cloud-based provider of integrated digital human capital and business solutions. Alight, Inc. (NYSE:ALIT) remains optimistic about its operational momentum heading into 2025. While the company expects full-year adjusted EBITDA of between $585 million – $610 million, it expects annual recurring revenue (ARR) bookings to grow by double digits in the latter half of the year. Alight, Inc. (NYSE:ALIT) expects a recovery in demand as it expands its client base. The company announced some critical wins in Q3 2024, with major clients like Hewlett Packard Enterprise, Nokia, and Siemens, indicating healthy market momentum.
Alight, Inc. (NYSE:ALIT) completed its cloud migration, which should drive ongoing savings and improve user experience. The company’s new cloud-based foundation creates a connected ecosystem that drives innovation, enhances availability and security, and improves performance, all within a streamlined infrastructure. The transition is expected to result in $75 million of annualized savings.
Alight, Inc. (NYSE:ALIT) is now well-positioned to deliver enhanced performance and increased capacity throughout the Alight Worklife platform. The company expects strong demand for its integrated platform, which should drive user engagement and experience. Alight, Inc. (NYSE:ALIT)’s go-to-market strategy has been enhanced, with a strong focus on enterprise sellers and domain experts.
Polen Capital, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“We exited four positions during the quarter, including SiTime, AppFolio, RH, Doximity, and Alight, Inc. (NYSE:ALIT). Our position in Alight, a benefits outsourcing and business process-as-a-service company, was an unsuccessful investment. We decided to move on due to activist pressure that led to a breakup of the business. We were dissatisfied with both the plan and the new standalone business. This culminated with the CEO leaving and uncertainty over the company’s long-term strategic direction. As a result, we felt it was time to move on with better investment ideas in our pipeline.”
While we acknowledge the potential of ALIT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than ALIT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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