There is simply no denying that the world has changed over the past year. While the digital transformation of society was already underway and even accelerating, the stay-at-home orders in 2020 and the consequent urgent need to convert a large number of jobs into remote positions led many companies for the first time adopted solutions for cloud computing.
Once companies have experienced the convenience of allowing employees to access their applications, data, and platforms from anywhere, you simply do not need to return. And the list of products and services available through the cloud is growing and growing. The cloud computing market, which is estimated to reach $ 371 billion in 2020, is expected to reach $ 832 billion by 2025.
Obviously, investors are looking for the best ways to take advantage of this opportunity and tackle the growing wave of cloud adoption. These three companies offer their shareholders clear opportunities to take advantage of the trend.
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1. NVIDIA: the best choice of data centers worldwide
While NVIDIA (NASDAQ: NVDA) may not seem like a cloud computing business at first glance, but you have to search far and wide to find an important data center that does not use the latest processors.
Nearly every one of the world’s leading cloud vendors is turning to NVIDIA’s graphics processing units (GPUs) to help them process data. The list contains Amazonsay (NASDAQ: AMZN) AWS, Alphabetsay (NASDAQ: GOOGL) (NASDAQ: GOOG) Google Cloud, International business machines‘IBM Cloud, Microsoftsay (NASDAQ: MSFT) Azure, en Alibaba Cloud – and these are just the big dogs. Many smaller businesses also rely on NVIDIA’s GPUs to make the data flow.
Why NVIDIA? Its modern GPUs have unmatched parallel processing capability, enabling them to handle multiple complex mathematical calculations simultaneously. It seems that this capacity is not only the key to delivering lifelike images in video games; it is also the best solution available to power AI systems and support cloud computing.
During the first nine months of 2020, NVIDIA’s revenue increased 49% year on year. However, its data center segment, which provides processors for cloud computing, data centers and AI, grew by 138% over the same period – and this may be just the beginning.
Given the widespread acceptance of cloud computing and the need for the company’s GPUs to power the servers, NVIDIA has a long and prosperous runway ahead.
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2. Atlassian: Help remote teams to bridge the gap
One byproduct of the upheavals of recent years is the growing recognition that the rise of remote employment will survive the pandemic. According to a survey by 74% of CFOs, their businesses plan to move at least some employees to remote jobs permanently. Gartner. As a result, teams will still need effective tools to help them work together over the distances.
It is true Atlassian (NASDAQ: TEAM) come in. It provides a cloud-based platform that applies the increasingly decentralized work world, allowing colleagues to not only communicate in real time, but also collaborate on tasks, delegate tasks, share content and manage projects. The Atlassian Marketplace also offers more than 4,000 third-party apps to customize the experience, and recently reached the milestone of more than $ 1 billion in lifelong sales.
In its first fiscal quarter, which ended Sept. 30, Atlassian’s revenue grew 26% year-on-year. More importantly, its enrollment revenue – driven primarily by cloud-based products – grew by 38%. Those strong financial results were the result of good customer profits. It added 8,620 net new customers in the quarter, bringing the total to 182,717. Year after year, the figure rose by 14%. This customer base contains an impressive 83% of the companies that make up the Fortune 500.
Atlassian sits at the intersection of three massive and growing markets: software, IT management and general work management. Together, they create a total accountable market for the company of $ 24 billion. Given Atlassian’s consecutive twelve-month revenue of just $ 1.7 billion, it should provide many opportunities for continued growth.
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Amazon: Pioneer and still king of the hill
It’s hard to have a discussion about cloud computing without talking about one of the pioneers in the field: Amazon. When Amazon Web Services (AWS) debuted in 2006, it became the first to offer an infrastructure-as-a-service (IaaS) platform, a forerunner of modern cloud computing. The company has had the market for itself for a few years and still dominates the space today.
At the end of 2020, Amazon controlled about 32% of the cloud infrastructure services market, with Microsoft’s Azure and Google Cloud in second and third place with 19% and 7% respectively, according to data compiled by market analyst Canalys.
It is difficult to overestimate the importance of cloud computing for the technology giant. During the first nine months of 2020, AWS accounted for nearly 13% of Amazon’s revenue and 62% of its operating profit, while operating margins of more than 30% were generated.
These cash flows and profits have helped fund much of the expansion of Amazon’s other business segments. This is especially true of its international e-commerce operations, which are still operating at a break-even point.
Even 15 years after its debut, AWS continues to expand at a remarkable pace, especially considering its size. For the first nine months of 2020, AWS grew by 30% compared to the previous year.
Given the acceleration in the adoption of cloud computing as a result of the pandemic, you should not expect Amazon’s profits in this arena to decline any time soon.