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Stock Market Analysis

3 Great Cloud Stocks That Aren’t Amazon

Digital storage and software are in hot demand as the pandemic forces people to work remotely. Are these 3 stocks worth looking at?

As the world grapples with the effects of the ongoing pandemic, the crisis has accelerated the need for good cloud infrastructure. Many companies are flocking to such technologies in a bid to ensure that employees have secure and easy access to the documents they need while working from home. While the first company that might come to mind is industry leader Amazon (NASDAQ: AMZN), there are several competitors making a big indent in the space. 

Twilio

Twilio (NYSE: TWLO) plays an integral part in some very well-known businesses including Uber (NYSE: UBER), Lyft (NASDAQ: LYFT), and Airbnb. Twilio assists developers in producing communication systems within its applications and it’s estimated that its business is capable of growing by 40% in fiscal 2020. That’s no surprise considering it has partnered with a number of companies providing telehealth services as well, including Epic Systems and Zocdoc. At its recent earnings call, Twilio’s revenue increased by 57% to $364.9 million — beating estimates by 10%. The business is also attracting more users, with its customers up by 23% year-on-year to 190,000. 

However, while this company has received a strong boost due to the need for more digital communications, it isn’t immune to the coronavirus. It’s likely these increasing trends will reverse come the second half of 2020 as the globe slowly returns to normality. Also, Twilio is valued at around 18.5 times the average analyst target for this year’s sale, making it an expensive buy. 

Overall, the fairly new kid on the block has seen an increase of around $20 million compared to the same time last year, totaling $458.2 million. This company is one to watch, and will likely be a great long-term investment.

Veeva

Veeva (NYSE: VEEV) shot to an all-time high after it revealed some better than expected first-quarter earnings on May 28, 2020. The company has delved into a very niche market that has more than 600 customers including top drugmakers like Novartis (NYSE: NVS). Veeva’s life science cloud-style services helped increase the company’s revenue to $337.1 million for the year, up 38%. This amount was highly attributed to its higher-margin subscription service during the quarter, which accounted for 80% of revenue.

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However, not only does this company have some stiff competition like Oracle (NYSE: ORCL), it is also trading at nearly 90 times its forward earnings, making it a pricey stock compared to its earnings potential. While this may be a concern for investors, it is still a relatively young company, founded in 2007, and is likely to keep impressing. As for its work in cosmetics and consumer goods, this industry was impacted much more from COVID-19. However, the company has a strong focus on its life sciences business and telehealth will likely be a driving factor for Veeva in the future. It’s expected to post an annual revenue between $1.38 – $1.39 billion. 

Adobe

This computer software company reached an all-time high with its shares on Wednesday, June 10, of $409.98, after it reported impressive earnings. Adobe’s (NASDAQ: ADBE) Creative Cloud and Document Cloud Web Traffic grew by almost 40%, so It’s no surprise that Adobe’s digital media revenue jumped by 18% year-on-year to $2.23 billion at its recent quarterly earnings. Overall, the company’s revenue grew by 14% annually to $3.13 billion.

However, Adobe said the coronavirus has led to delays in expected enterprise bookings as well as consulting services, and it cut spending. There has also been a drop in demand from small and medium-sized businesses. In addition, product revenue dropped to $128 million compared to $152.8 at the same time last year. However, despite the testing times for all, Adobe has performed very well and is a good stock to invest in for the long term.


MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

Alsha Coppolina
Alsha Coppolina
Alsha is a contributing writer to MyWallSt. Alsha’s favorite stock is Shopify because not only does she enjoy a bit of online shopping, but she believes the e-commerce solutions business is going to continue making big gains.