ETFs
Is it time to opt for cloud ETFs on strong earnings and promising growth?
Cloud computing has been at the forefront of technological growth in recent years, providing efficient solutions for businesses and consumers. The global cloud computing market is expected to grow from $626.4 billion in 2023 to $1.27 billion by 2028, with a CAGR of 15.1%, according to MarketsandMarkets.
The widespread adoption of remote work and e-commerce has continued to fuel the need for scalable and reliable cloud solutions. Additionally, advancements in cloud technologies, including artificial intelligence (AI), machine learning (ML), and improvements in cybersecurity, have expanded the use cases for cloud services, attracting a broader customer base.
The global cloud computing market is led by three mega cloud service providers: Microsoft, Google Cloud and Amazon Web Services. The total cloud infrastructure market was worth $76 billion globally at the end of the first quarter of 2024, representing a year-over-year increase of 21%.
According to recent data from Synergy Research Group cited on CRN, AWS, Microsoft and Google collectively managed a 67% share of the $76 billion global cloud infrastructure services market in the first quarter of 2024.
Parent Google Alphabet GOOGLE, Microsoft MSFT and Amazon AMZN recently released its quarterly cloud financial numbers for the first quarter of 2024. Each company reported record quarterly cloud sales thanks to double-digit growth rates.
Inside Mega Cloud’s Q1 Size
Together, these three cloud leaders generated more than $61 billion in total sales in the first quarter of 2024. Their cloud units actually drove total revenue growth as customers increasingly adopt AI services. Growth rates are rebounding from the relatively low levels seen through most of 2023.
Individually, Microsoft’s Intelligent Cloud business generated total revenue of $26.7 billion (up 21% year-over-year) in the quarter, meaning the group Microsoft’s cloud now has revenue of $107 billion.
AWS generated just over $25 billion in revenue (up 17% year-over-year). This means that Amazon’s cloud business now has annual revenue of $100 billion.
Google Cloud reported total revenue of $9.6 billion (up 28% year over year). This shows that Alphabet’s cloud business currently generates annual revenue of $38.4 billion.
In terms of global market share, AWS leads (with a 31% share), followed by Microsoft (25%) and Google (11%). Other Q1 cloud market share leaders include Ali Baba BABA at 4% market share and Selling power CRM at 3% cloud share.
Growing demand for cloud computing from other businesses
Alibaba’s Cloud Intelligence Group revenue rose 3% year-over-year, despite lower prices in the first quarter. Like Alibaba, Baidu BIDU also saw upbeat results thanks to AI Cloud’s revenue boom. Baidu’s AI Cloud Group revenue grew 12% year-over-year, driven by generative AI and core models, which Baidu is seeking to further strengthen.
The story continues
Promising growth in 2024
According to Gartner forecasts, global end-user spending on public cloud services is expected to increase 20.4% to $678.8 billion in 2024, from $563.6 billion in 2023. All market segments cloud services are expected to see growth in 2024. -a-service (IaaS) is expected to see the highest growth in end-user spending in 2024, at 26.6%, followed by platform-as-a-service (PaaS) at 21. 5%.
Focus on ETFs
Wisdomtree Cloud Computing Fund WCLD, Global Cloud Computing ETF NAIL, Amplify Global Cloud Technology ETF IVES, Fidelity Cloud Computing ETF FCLD and First Trust Cloud Computing ETF SKYY is one of the ETFs that can be played in a boom. All of these ETFs have gained between 4% and 5% over the past week.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Salesforce Inc. (CRM): Free Stock Analysis Report
Baidu, Inc. (BIDU): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Alibaba Group Holding Limited (BABA): Free Stock Analysis Report
First Trust Cloud Computing ETF (SKYY): ETF Research Reports
Global X Cloud Computing ETF (CLOU): ETF Research Reports
WisdomTree Cloud Computing ETF (WCLD): ETF Research Reports
Amplify Global Cloud Technology ETF (IVES): ETF Research Reports
Fidelity Cloud Computing ETF (FCLD): ETF Research Reports