We recently compiled a list of the 10 Best Cloud Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Alphabet Inc (NASDAQ:GOOG) stands against the other cloud stocks.
Based on a report by MarketsandMarkets, the global cloud industry in 2025 is projected to grow by 15.1% to $1,256.8 billion. While 2024 was marked by high adoption by the BFSI sector, the year ahead should see applications being developed that meet the unique specifications of each industry. North America and Europe should capture the bulk of the market size but APAC is expected to register the fastest growth. The integration of AI with cloud platforms accompanied by new service models is another key development expected to shape this industry.
Cloud ETFs have generated generous returns of 2.74%, 28.54% and 11.00% for 1-month, 6-month and 1-year tenors. One would assume that the underlying stocks would continue to perform well, propelled by strong industrial tailwinds.
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article we picked 10 cloud stocks trending on latest news. With each stock we have mentioned the number of hedge fund investors. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc (NASDAQ:GOOG)
Number of Hedge Fund Investors: 202
Google Cloud is the cloud platform of Alphabet Inc (NASDAQ:GOOG) that has a 13% market share in Q3-24, up by 200 basis points from a year ago. This segment has been growing at a rapid rate of 35%, generating a quarterly revenue of $11.4 billion. With deep pockets and an inclination to venture into untapped markets, there have been a number of key developments that suggest that the cloud business will continue to thrive.
GOOG has invested $1 billion in the cloud infra of Dammam, Saudi Arabia and $2 billion in data centers across Malaysia. It has pumped an additional $1 billion into funding to Anthropic, an AI safety and research company that had already received $2 billion earlier. GOOG has been actively developing the cloud infrastructure across the globe and at the same time building partnerships with big firms like Walmart, Ford, CVS and Verizon. The investment in the cloud infrastructure of emerging countries also provides an opportunity to absorb smaller players into the cloud platform.
Overall GOOG ranks 3rd on our list of the best cloud stocks to buy according to hedge funds. While we acknowledge the potential of GOOG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GOOG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
