What’s the most attractive cloud computing stock right now?
We asked Seeking Alpha analysts Cyn Research and Victor Dergunov for their picks.
Cyn Research: Amazon’s (NASDAQ:AMZN) AWS, with more than $30 billion in quarterly revenue, remains the largest cloud platform and is still expanding at ~17% annually. Growth could accelerate further as Anthropic-related demand scales. Trading at a historically low NTM P/E of 31.6x makes AMZN look attractive today.
Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) also impresses, with Google Cloud growing over 30% while its backlog rises even faster, showing sustained demand. Operating margins are continuing to rise each quarter, and at 24x NTM P/E, GOOG appears reasonably valued.
Victor Dergunov: The cloud computing space is highly competitive, and there are several top players in the segment. My personal favorite cloud play is Amazon (NASDAQ:AMZN) because of AWS’s leading position.
Microsoft (NASDAQ:MSFT) is close, but I am not a fan of Microsoft stock because I believe it’s expensive, and Amazon is relatively inexpensive, in my view, and it has been consolidating for some time.
Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) has improved its position, but I still think Amazon’s AWS has the edge.
Outside the U.S., I like Alibaba (NYSE:BABA) as a top cloud play in China and Asia. Baidu (NASDAQ:BIDU) and Tencent (OTCPK:TCEHY) (OTCPK:TCTZF) are also excellent Chinese cloud plays with enormous intermediate and long-term potential.