World renown investment Guru Jim Cramer recently published an article on CNBC in regards to the future of cloud computing and in his own words, he said, “I’ve been telling you over and over that cloud computing is the future.”
In Cramer’s specific article, he talks about a company called Workday. Cramer commented on Workday by saying, “The relatively young company posted a smaller than anticipated loss, with revenues that soared 74.1% year over year, higher than what the analysts were looking for.” Cramer went on to say, “Workday helps companies save a bundle on tech hardware costs because it means they no longer need expensive servers hosting their own data.” Companies like Workday embody the cloud market.
This trend is becoming common among cloud companies. Many cloud companies have outspent their competition in 2013 which depressed their stock prices. A perfect example of this is RackSpace. RackSpace invested billions of dollars into their cloud in 2013 so that they can see profits in 2014 and 2015. If you look at RackSpace’s stock charts, you’ll see the stock wildly fluctuate between 30 and 60 dollars with the quote currently being on the low side of this given range. Since the outlook for the cloud is exceedingly bright and given the fact that RackSpace has sunk serious amounts of time, money and infrastructure into building out OpenStack, it gives you the idea that this cloud provider could be on the cusp of booming.
Oracle is another company that could be lumped into this category of spend now, reap rewards later. Oracle has invested billions in order to become competitive with the likes of SalesForce.com and others. Oracle and RackSpace are both part of the SKYY electronically traded fund and if you invested in this ETF, you would have ownership in these companies as well as a collection of other notable cloud corporations. We encourage you to do your own research when picking stocks because this article is not meant to be construed as an investment advice; it’s merely an observation as to what could happen.