Use This Zacks Tool to Find Strong Cloud Stocks

Cloud Computing Overview

Cloud computing refers to the on-demand seamless access of computing resources such as servers, storage, databases, networking, software, analytics, and intelligence over the Internet (the cloud) on a pay-per-use pricing model.

It marks a paradigm shift from traditional on-premises infrastructure storage to remote cloud-based storage facilities and relies heavily on virtualization and automation technologies. Instead of buying, owning, and maintaining physical data centers and servers, organizations access a virtual pool of shared resources from a cloud service provider on an as-needed basis.

This lowers operating costs, increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale.

Microsoft Posts Huge Cloud Growth

Microsoft  MSFT posted a double-beat relative to our consensus expectations, with sales growing by 18% YoY alongside 23% YoY growth in earnings. Most importantly, the mega-cap heavyweight delivered favorable Intelligent Cloud results, a key benchmark the market has consistently scrutinized amid the billions it’s been investing in AI infrastructure.

Microsoft’s Intelligent Cloud results include Azure, its cloud computing platform that provides AI computing power to businesses. Intelligent Cloud revenue came in at $39.3 billion, beating our consensus estimate handily and growing 32% YoY. The growth rate here is mightily important from a sentiment standpoint, showing an acceleration relative to recent periods.

Enterprise adoption of Copilot surged throughout its FY26 to over 30 million paid seats, further underpinning the momentum the company is enjoying thanks to its AI-related investments.

Bottom Line

Thematic investing has emerged as a powerful way for investors to sync their portfolios with emerging trends. A mix of long-term and short-term themes is increasingly dictating which companies lead as economies expand and markets shift.

While stocks in each theme aren't direct recommendations, they offer a solid starting point. Leverage the Zacks Rank and other metrics to identify the best stocks for your strategy. Each featured stock comes with a Zacks report, giving you the tools to analyze performance and potential.

The Cloud Computing thematic list, which currently Microsoft MSFT is part of, focuses on technology companies that provide the related hardware and software to enable cloud computing services, the communication service providers that offer the network facilities and the various firms that utilize the services across diverse sectors like financial, consumer discretionary and industrials.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

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This article originally published on Zacks Investment Research (zacks.com).

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