Investing in Cloud Computing Stocks: A Beginner’s Guide
As the world is moving towards digitization, cloud computing has become an increasingly vital technology for businesses. Cloud computing stocks have been on the rise for the last decade. Many investors have gained significant returns from investing in cloud computing stocks. However, for beginners, investing in cloud computing stocks can be intimidating. This article is aimed at providing a beginner’s guide to investing in cloud computing stocks.
What is Cloud Computing?
Cloud computing refers to the practice of using a network of remote servers hosted on the internet to store, manage, and process data. Cloud computing enables businesses to access computing power and storage without the need for expensive hardware and software infrastructure. Cloud computing has now become an essential technology for businesses of all sizes.
Why Invest in Cloud Computing Stocks?
Cloud computing stocks offer a unique investment opportunity for investors. Cloud computing is a growing industry, with the market size expected to reach USD 832.1 billion by 2025. Therefore, investing in cloud computing stocks can offer investors high growth potential. Additionally, cloud computing stocks are beneficial for diversification as the industry crosses various sectors, including software, hardware, and services.
Top Cloud Computing Stocks to Invest In
Here are some of the most promising cloud computing stocks to invest in for beginners:
Amazon Web Services (AWS)
AWS is a subsidiary of Amazon and is the largest cloud computing service provider in the world. AWS has a massive market share of nearly 32%, and their revenue increased by 32% YoY. AWS provides cloud computing services to businesses and individuals worldwide and offers services such as storage, computing, analytics, and security.
Microsoft Cloud
Microsoft cloud is the second-largest cloud computing provider, with a market share of 18%. Microsoft’s cloud computing platform offers services such as software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS) to businesses.
Alphabet Inc. (Google Cloud)
Google Cloud offers IaaS, PaaS, and SaaS services to businesses worldwide. Its most popular products include Google Cloud Storage and Google Kubernetes Engine (GKE). Google Cloud has a market share of 10%, and their revenue increased by 53% YoY.
Risks of Investing in Cloud Computing Stocks
Although cloud computing stocks offer excellent growth potential, there are still risks associated with investing in them. One of the most significant risks is that the cloud computing market is highly competitive, and several large companies dominate the market. Any disruption in the industry can affect the share prices of these companies. Additionally, the companies’ dependence on cloud computing can be a risk factor, as any data breaches or outages can significantly impact their business and, in turn, their stock prices.
Conclusion
Investing in cloud computing stocks can offer attractive returns to investors, but only if done right. Before investing in any cloud computing stock, beginners should thoroughly research the industry and the individual company. It’s essential to understand the risks and invest wisely. With the right approach, cloud computing stocks can be a valuable addition to any investment portfolio.
