We recently published a list of 8 Cloud Computing Stocks Under $10. In this article, we are going to take a look at where Upland Software, Inc. (NASDAQ:UPLD) stands against other 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.
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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).
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.
Overall, UPLD ranks 6th on our list of cloud computing stocks under $10. While we acknowledge the potential of UPLD 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 time frame. If you are looking for a deeply undervalued AI stock that is more promising than UPLD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.