Many of the cloud stocks have been quite resilient throughout the global health crisis since the sector is well insulated from the headwinds caused by the coronavirus pandemic. The recent weaknesses shown by top software stocks could simply be because they were “too hot” in recent months. And it is only natural for them to take a breather. However, the potential for cloud services is huge, making them a sector worth watching over the next decade. Much of the fundamental strengths were no doubt, accelerated by the novel coronavirus when the world suddenly found the need for remote work and online learning. Earlier this year, analysts from Wells Fargo (WFC Stock Report) were spot on when they said top enterprise software stocks will head higher.
The thesis? Enterprise software spending could pick up this year, and it wasn’t because of the pandemic. That’s simply because corporations hit the pause button for robust enterprise software spending in 2019 for two major reasons. Firstly, most corporations were on a spending spree back in 2018 when it comes to enterprise software. So, there wasn’t really a need to further spend on this area. Secondly, uncertainties created by geopolitical tensions have certainly occupied the minds of executives who may not want to spend big. Little did we know that the coronavirus pandemic will be the major catalyst for the cloud companies, sending some of the top cloud stocks to their all-time highs levels.
Now, these stocks are currently exhibiting signs of strong rebound after the recent sell-off. Investors appear to be rushing back to the cloud space. No matter how you put it, you can’t deny that some of these stocks continue to have a lot of potential. That said, are the following cloud stocks on your watchlist?
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First, up the list, Oracle Corp (ORCL Stock Report) is one of the best cloud stocks to watch this week. First, it reported stronger than expected earnings. As a result, ORCL stock rose as much as 6% in extended trading on Thursday.
“While the consumer-focused, short-form mobile video app seems far removed from Oracle’s enterprise software business, Oracle’s billionaire founder and Chairman Larry Ellison has a history of opportunistic acquisitions — especially when he feels an asset is underappreciated or offers great strategic advantages for Oracle,” Patrick Walravens and Joe Goodwins of JMP wrote in an Aug. 19. report.Top Cloud Stocks To Watch In September 2020: Salesforce.com
Salesforce (CRM Stock Report) saw its stock hit all-time highs following its second-quarter earnings report. The cloud services provider reported over $5 billion in quarterly revenue for the first time ever. Its billing growth accelerated.
Also, their adjusted operating margin hit an all-time high. If that is not enough for investors, the company also raised guidance for the year.
As Salesforce’s services automate business processes, they reduce a company’s reliance on human employees. Going forward, this is a secular trend that seems unstoppable. Demand for these services will continue to climb as companies cut expenses. And Salesforce is at the top of the customer relationship management market. That makes it a dependable growth stock for long-term investors.Top Cloud Stocks To Watch In September 2020: MongoDB
While there are many ongoing developments in the cloud space, the database business remains stuck in the past. And that’s where MongoDB (MDB Stock Report) comes into the picture. The company aims to store all electronic information with its innovative cloud-based solution.
While it’s not a major name like Amazon (AMZN Stock Report) or Microsoft (MSFT Stock Report), its flagship services have gained traction over the years. Since its inception in 2009, its flagship database services saw more than 90 million downloads.
With the vast majority of the new database demand pivoting towards cloud-based applications, MDB stock is well-positioned for a huge upside in the long run. Although the company has yet to be profitable, it is sitting on $978 million in cash and securities. This provides plenty of buffers for the company to continue growing and investing in itself in the next few years. All these make MDB one of the best cloud stocks to buy in September.