Stocks to buy

The 3 Best Cloud Computing Stocks to Buy in January 2024

Cloud computing stocks will continue to be prominent wealth generators for tech-oriented investors. With the emergence of generative AI, investors can continue to benefit from the tailwinds of cloud computing infrastructure. As a central component for businesses, cloud computing will continue to play a significant role in how data is shared, stored, and scaled at large. This is made cloud computing stocks to buy very desirable.

The demand for cloud services is stronger than ever, with particular companies holding market share dominance. If you’re seeking growth opportunities that have the potential to outperform the market, then you should look no further than this industry. 

Now, let’s explore the three best cloud computing stocks 2024!

Oracle (ORCL)

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Oracle (NYSE:ORCL) makes a strong case as the best cloud computing stocks to buy in January 2024. Oracle’s industry leading cloud computing platform has seen an acceleration in demand, largely driven by generative AI offerings. Furthermore, the company is in the midst of a huge data center expansion in the cloud infrastructure market. 

The advent of artificial intelligence has created a new outlook for the cloud computing market. This is particularly evident for Oracle, as they are one of the leading cloud computing companies in the world. Oracle currently holds approximately 8% market share in the cloud infrastructure market, and generative AI is set to be a huge business driver moving forward. In Q2 FY24, Oracle’s revenue grew 5% YOY to $12.9 billion.

Cloud revenue grew 25% to $4.8 billion, with cloud infrastructure revenue up 52%. CTO Larry Ellison is bullish on their ability to build and scale new data centers both rapidly and inexpensively. With Oracle’s cloud businesses at a $20 billion run rate, now is a great time to snap up shares in January 2024. 

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) stock just recently crossed the $3 trillion market cap status. Wall Street is becoming increasingly bullish on its generative AI prospects, as Azure cloud deployment starts to ramp up in FY24. Microsoft Azure, is one of the leading cloud computing companies in the world, used by more than 95% of Fortune 500 companies

The 2024 fiscal year will be a significant transition year for Microsoft, as they begin to ramp up their generative AI offerings. There are a number of different catalysts to look forward to, including Microsoft’s copilot software. This software is going to be a game changer for its Azure cloud customers, increasing both workloads and productivity at scale. They will be able to leverage LLMs to scale generative AI applications and operate Azure services with improved cost-structure and security.

Microsoft has been gradually increasing CAPEX to meet the growing demands of generative AI services, with cloud revenue seeing strong double digit growth. In Q1 FY24, revenue in the intelligence cloud surged 19% YOY to $24.3 billion. Integration across its entire tech stack is just beginning, and its early bets on AI are already paying dividends.

Amazon (AMZN)

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Amazon (NASDAQ:AMZN) should need no introduction when considering the best cloud computing stocks to buy. Their wholly owned subsidiary, Amazon Web Services (AWS), is the largest cloud services company in the world. They hold nearly a one-third market share in cloud infrastructure services

Amazon is about to close off a strong 2023 fiscal year, and 2024 should prove to be another transformative year. Generative AI tailwinds continue to show promising signs of growth ahead, as demand skyrockets for its AWS customer base. Throughout 2023, Amazon has implemented significant cost-cutting measures in order to strengthen their position in the AI race. Restructuring efforts have proven to be material, as revenue, EPS, and operating income have risen to the occasion.

Additionally, AWS revenue is trending in the right direction and growth is likely to accelerate over the next decade. In Q3 2023, AWS revenue increased 12% YOY to $23.1 billion. Generative AI offerings have been the primary driver, and investors should expect growth to continue in FY24. 

On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.

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