While Wix has seen slower growth in recent quarters, investors are eyeing other cloud stocks available in the market. Wix has not been the only cloud stock to see slower growth but this has not stopped some investors from feeling bullish about cloud stocks in the long run. These long term investors see the role that cloud computing and therefore cloud stocks will play in the future. This correlates with the rise of things such as remote-work, 5G networks and artificial intelligence. All of which are important aspects of the future of the technology space. Additionally, global cloud services spending will grow to an estimated $482 billion in 2022 which is an increase from $313 billion in 2020.
Amazon has had an underperforming year in 2021 thanks to the deceleration of growth in the e-commerce industry, disruptions in supply chain due to covid and an increase in the cost of labor. However, Amazon is the global market share leader in cloud computing services and it is set to have a strong 2022. With supply chain issues resolving and the ever increasing popularity of e-commerce at its side Amazon is predicted to rise significantly in 2022. The Amazon Web Services subdivision of Amazon reported a 40% year over year increase in revenue which sent the price of the stock soaring. Market experts predict a strong year for Amazon and it is one of the leaders in cloud stocks at present.
Microsoft’s Azure cloud computing service has made it one of the top dogs in the cloud computing space and a strong contender behind Amazon. Microsoft has been described as a top pick for 2022 as many enterprise customers are migrating vital workloads to the Azure service. On top of this, the ever-expanding scale of Azure, cost saving measures and the strength of Office 365 will increase the margins which Microsoft is generating even further. This makes Microsoft a solid stock option in the cloud computing space and it is predicted to have a strong year in 2022.
Alphabet Inc. which is the parent company of Google and Youtube maintains a far-off third place in the cloud computing market. A large driver behind revenue growth for Alphabet is Youtube monetization. This is in combination with the increasing revenue which Google cloud services are predicted to generate in the coming year. It is estimated that Google cloud services will generate $7 billion in incremental profits between 2021 and 2024. This is however contingent on the cloud services reaching a 10% margin by the year 2024. Investors should keep a keen eye on the cloud services margin trends as this is the best indicator of the success of service.
Salesforce.com is the current leader of the market in terms of customer relationship management software and is one of the top providers for cloud computing services. In December of 2021, Salesforce reported a 21% growth in revenue for their Service Cloud which included a 26% growth of revenue in the marketing and commerce sector. It is projected that Sales Cloud will experience an 8.6% increase in revenue growth in the 2022 financial year. This growth is expected to continue into 2023 and 2024 which makes it a solid choice for investment in the cloud computing space.
Adobe Inc. is one of the leading providers of creative content software, e-commerce applications and marketing automation tools. Adobe reported a 29% increase in Document Cloud revenue in December of 2021. The annual recurring revenue of Document Cloud grew to a massive $1.93 billion in the last quarter of 2021. There are several compelling reasons to invest in Adobe stock and these include: the large subscriber base of Creative Cloud, the depth of its digital content and software portfolio and its large channel for distribution of sales and marketing personnel.
A tool which Adobe does not provide in its large wheelhouse of options is a website builder. The Wix website builder is a very easy to use drag and drop website creation tool. It offers over 800 templates and a multitude of creative and fun ways to build a website. It also offers support for e-commerce platforms which make it an exceptionally useful tool for getting started in the e-commerce space.
The three giants of cloud-computing services, Amazon, Microsoft and Google remain solid options for investment when considering the cloud computing arena. However the big boys are not the only solid options when it comes to cloud stocks. Other strong contenders such as Salesforce and Adobe are showing significant growth in their cloud computing offerings which make them excellent choices for investment as well. These players deserve consideration due to the exceptional revenue growth which their cloud computing services are showing.