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Stock Market Analysis

Top Stocks That Investors Should Have In Their Portfolio This February

This month’s top picks are all about cloud computing, as the entire world becomes ever more digital, these 3 stocks will be great additions to your portfolio

Although they might not be the most exciting of companies, our top stocks to invest in for February are all about the ever-expanding cloud computing sector. However, here are three very different companies that show just how largescale this industry has become.

Without further ado, here are 3 great companies to add to your portfolio this month.

1. Cloudflare

Cloudflare is an exciting business, particularly for those working in the technology sector. It develops web-based and edge network security and content delivery services. It does this by optimizing the websites of over 3 million clients worldwide and protecting them from a myriad of problems, allowing them to process and return information quickly. In fact, it is estimated that Cloudflare protects its customers from an average of 72 billion cyberthreats per day. 

Cloudflare offers the majority of its services for free, with larger companies only paying for an enhanced and fuller range of services and support. This means that marketing and sales costs are kept down whilst it reinvests in research and development. 

On the financial side of things, Cloudflare recently raised full-year guidance for 2020 to $422.5 million which is 47% year-over-year (YoY) growth. In its most recent quarter, it posted a 54% increase in revenue to $114.2 million. Furthermore, it also saw really strong customer growth with roughly 100 large enterprise customers added in the quarter. 

For a company that is not yet profitable, it certainly seems to be on its way.

2. Microsoft

It might seem a little too late to join the Microsoft party, surely that was back in the early 2000s? But in its most recent earnings, Microsoft has once again proven that it is a company that will be around for a long time to come and will continue to grow steadily during that time. 

Indeed, Microsoft rose around 6% in extended trading on the day of its latest earnings report. It smashed Analysts’ expectations with earnings of $2.03 per share and revenue of $43.08 billion which is up 17% YoY. Included in this, Microsofts Intelligent Cloud business segment revenue was up 24% totaling $14.6 billion. This segment includes the likes of Azure public cloud, Windows server, GitHub, and enterprise services.

It is in this sector that Microsoft will continue to grow. Currently, it is the second-largest provider of cloud computing services, with an 18% market share. Whilst Amazon holds a 33% market share and is currently number 1, it was looked over in favor of Microsoft for the U.S. JEDI contract, a contract that is worth $10 billion over a 10 year period.

This company is one which we have known, loved (and sometimes hated in frustration) as it has filled our homes with computing technology. But, moving into a digital era and this company is well-positioned to keep on growing for the foreseeable future. 

3. Veeva Systems

With yet another stock this month focused on cloud computing Veeva Sytems (NYSE: VEEV) is a great option to invest in as it provides cloud services to companies that work within Healthcare, Life sciences, and other related industries. In fact, Veeva is currently working with several companies that are producing the COVID-19 vaccine, such as Moderna and AstraZeneca.

In its latest earnings, Veeva posted a 34% revenue increase YoY to $378 million which also smashed expectations by a cool $16 million. For the next quarterly earnings call, Veeva expects it to bring in at least $378 million and produce earnings of $0.67 per share. 

Veeva provides CRM services that are powered by its partner, Salesforce. Its services have been picked up by more than 950 companies in the pharmaceutical, life science sector. As it does not yet have any direct competition, it has a first-mover advantage and thus it has pricing power. Sitting happily in its niche area, Veeva has a goal of generating $3 billion in annual revenue by 2025. 

This stock is one to watch as it goes from strength to strength and it is certainly a great option to invest in this February.

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

Poppy Murray
Poppy Murray
Poppy is a contributing writer to MyWallSt. Poppy likes companies that go the extra mile. Her favorite stock is Amazon because she is fond of its innovation, variety, and creative solutions to sustainability.