We recently published a list of 8 Cloud Computing Stocks Under $10. In this article, we are going to take a look at where Yext, Inc. (NYSE:YEXT) 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.
A professional in a suit looking at data on a laptop, representing the store information of the company.
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).
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.
Overall, YEXT ranks 3rd on our list of cloud computing stocks under $10. While we acknowledge the potential of YEXT 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 YEXT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
