In this article, we will discuss the 10 Best Cloud Computing Stocks to Buy According to Hedge Funds.
According to JP Morgan’s mid-year outlook 2026 report, there remains an indication that the AI investment cycle would continue through the remainder of 2026. After the Q4 earnings reporting season (between January and February 2026), the 5 well-established hyperscalers increased capex projections for 2026 by $130 billion.
The Wall Street analysts project that they will spend over $650 billion together through the end of this year (2026), with a major portion of this to be used for expanding their cloud-based AI capacity. JP Morgan further added that hyperscalers’ FCF might be falling, but their top-line in their cloud businesses continues to accelerate. This gives the go-ahead to continue the aggressive AI build-outs. Notably, the hyperscalers remain well-placed to reap the benefits stemming from the continued AI adoption. This is despite the increased skepticism in the market about companies’ increased capex plans.
The firm added that the corporate executives believe that demand for cloud capacity by AI applications, projects, and companies continues to surpass the available supply.
Amidst such trends, we will now have a look at the 10 Best Cloud Computing Stocks to Buy According to Hedge Funds.
Our Methodology
To list the 10 Best Cloud Computing Stocks to Buy According to Hedge Funds, we sifted through the screener to shortlist companies that cater to the broader cloud computing sector. We also mentioned the hedge fund sentiments around each stock, as of Q1 2026. Finally, the stocks are arranged in an ascending order of their hedge fund sentiments.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10 Best Cloud Computing Stocks to Buy According to Hedge Funds
10. Procore Technologies, Inc. (NYSE:PCOR)
Number of Hedge Fund Holders: 35
Procore Technologies, Inc. (NYSE:PCOR) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 1, the company announced the roll-out of its connected Common Data Environment. This is a purpose-built CDE from the ground up on a single platform, which can help in unifying and verifying project data from approved design to handover. This helps to capture evidence in the flow of work and keeps the digital record in line with site reality. This trusted data foundation enables the agentic AI to act throughout the full construction lifecycle.
Where fragmented information has been hampering decision-making and leading to costly delays, connected data continues to define top-performing organizations. Developed specifically for European market requirements, Procore Technologies, Inc.’s CDE will initially be rolled out in the UK and Ireland before expanding across EMEA.
The company developed a localized UK Data Zone, while a dedicated EU Data Zone is expected to be launched in the fall of 2026.
Procore Technologies, Inc. offers a cloud-based construction management platform and related products and services.
9. Dynatrace, Inc. (NYSE:DT)
Number of Hedge Fund Holders: 46
Dynatrace, Inc. (NYSE:DT) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 17, Goldman Sachs analyst Matthew Martino lifted the firm’s price objective to $50 from $45 and maintained a “Buy” rating. There have been management discussions addressing the worries related to the slower Q4 net new annual recurring revenue growth as well as ambitious FY27 guidance. Post this, there was an improvement in the firm’s confidence in Dynatrace, Inc.’s FY 2027 outlook.
This is because the company’s management highlighted that the recent softness was mainly due to Europe. The analyst further added that several drivers were also outlined, which aid the credible path to reaccelerating growth with potential upside as the year moves forward.
In a different update, BMO Capital lifted the firm’s price objective on Dynatrace, Inc.’s stock to $50 from $43 and maintained an “Outperform” rating. The analyst highlighted that the company gave a credible bridge to FY 2027 annualized recurring revenue targets.
Dynatrace, Inc. offers a unified observability platform, which helps in combining AIOps, cloud monitoring, as well as application security.
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 59
International Business Machines Corporation (NYSE:IBM) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 23, Morgan Stanley lifted its price objective on the company’s stock to $267 from $225, and maintained an “Equal Weight” rating on the shares. As per the analyst, Dell and HPE earnings demonstrate that the enterprise server demand is far more inelastic than anticipated. This is despite significant price increases, considering the compute shortages, refresh activity, and increasing AI-associated infrastructure needs.
The analyst further added that the estimates for 2026 and 2027 appear to be too low. Furthermore, the firm’s analyst increased the EPS estimates by 5% – 6% for the compute-exposed companies.
In a different update, JPMorgan upgraded International Business Machines Corporation’s stock to “Overweight” from “Neutral” with a price objective of $291, up from the prior target of $270. The firm highlighted its confidence in H2 2026 software acceleration after the analysis of the company’s software business.
International Business Machines Corporation operates as an integrated solutions and services provider.
7. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 80
Datadog, Inc. (NASDAQ:DDOG) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 18, Scotiabank analyst Patrick Colville lifted the price objective on the company’s stock to $275 from $225 and maintained an “Outperform” rating on the shares. Even though the stock is commanding a high valuation, Datadog, Inc.’s capability for “beat-and-raise” in Q2 and 2026 can help the stock price movement.
In a different update, Truist analyst Miller Jump upgraded the stock’s rating to Buy from Hold while raising its price target to $300 from $190, highlighting the expectation of continued upside momentum. The analyst noted that enterprises have been prioritizing AI adoption over optimizing AI-related costs, and that customers remain in the early phases of their agentic AI journeys. There has been greater clarity in the stability of relationships with frontier labs. Jump also remains optimistic about the momentum in Datadog, Inc.’s non-AI-native customer base.
Datadog, Inc. operates an observability and security platform for cloud applications.
6. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 86
Adobe Inc. (NASDAQ:ADBE) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 17, Phillip Securities analyst Paul Chew maintained a “Buy” rating on the company’s stock, setting the price objective of $385.00. The analyst’s rating is backed by several factors that are related to the company’s growth profile and valuation.
The analyst noted that revenue and adjusted earnings continue to remain in line with the full‑year expectations, thanks to the robust adoption of Creative Cloud Pro as well as the expanding base of freemium users, mainly throughout Firefly, Express, and core creative applications.
Adobe Inc.’s management has been maintaining strong ARR and subscription growth targets. The focus is also on user acquisition now and monetization later with the help of upselling, AI‑driven SKUs, and higher generative credit consumption, noted Chew. While increased competition continues to persist in generative AI, the analyst opines that Adobe Inc.’s trusted IP position, enterprise demand for integrated workflows, and Firefly’s scaling ARR are expected to help future earnings.
Adobe Inc is a provider of multimedia and digital marketing software such as Photoshop, Illustrator, and InDesign, among others.
5. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 102
Alibaba Group Holding Limited (NYSE:BABA) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 24, Daiwa reduced the price objective for the company’s stock to $175 from the previous target of $200 and maintained a “Buy” rating on the shares. According to the firm, China’s 2026 618 shopping festival was a negative surprise. The firm opines that there is weakness in the e-commerce consumption trend in China.
Furthermore, the growth of the broader sector is limited due to the difficult macro backdrop, tightening of regulations, scaled-back national trade-in program, etc. Therefore, the firm downgraded China’s e-commerce sector.
In a separate update, Bloomberg reported that Alibaba Group Holding Limited sued the Department of Defense to be removed from the blacklist, which identifies the company as a supporter of the Chinese military. The company had appealed to the US justice system to avoid such a designation, which (according to the company) is arbitrary and unjustified.
Alibaba Group Holding Limited operates as a technology infrastructure and marketing solutions provider.
4. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 115
Oracle Corporation (NYSE:ORCL) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 23, Jefferies analyst Brent Thill maintained a “Buy” rating on the company’s stock and reiterated the price objective of $320. As per the analyst, the company continues to witness strong demand for cloud systems.
The investors were concerned after the company kept the same full-year sales outlook. Furthermore, it witnessed a small drop in the cloud software sales, which fell short of the Wall Street estimates. The analyst believes that, despite the short-term software drops, the core AI growth story remains strong and is expected to help rebound the shares.
In a different update, the U.S. Office of Personnel Management (OPM) gave Oracle Corporation a $395.8 million Federal HRIT Modernization Core Human Capital Management (HCM) contract. This is for delivering the federal government’s first governmentwide HR platform.
Oracle Corporation provides products and services, which cater to the enterprise information technology environments.
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 265
Alphabet Inc. (NASDAQ:GOOGL) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 22, Jefferies analyst Brent Thill maintained a “Buy” rating on the company’s stock and the price objective of $445. The analyst opines that the company has numerous key strengths in the AI race. Alphabet Inc. has a long history in AI, giving the company an edge over its competitors.
Furthermore, the analyst added that Alphabet Inc. has spent years building AI models, data centers, and tools, which are being used in Search, YouTube, Android, and other products. Thill also pointed towards Google Cloud, which has been growing as companies are adopting AI tools, giving the company another way to benefit from elevated AI spending beyond the core advertising business.
The next advantage is the company’s custom TPU chips. While its competitors are dependent on the outside suppliers, Google is into designing its own AI chips. This supports Alphabet Inc. in training and running AI models at a reduced cost. Also, it provides more control over the AI infrastructure.
Alphabet Inc. is a holding company that operates Google services such as search engines, ad platforms, Internet browsers, devices, mapping software, app stores, video streaming, and more. The company also offers cloud infrastructure and platform services, collaboration tools, and other services for enterprise customers.
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 282
Microsoft Corporation (NASDAQ:MSFT) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 22, the company announced one of the largest single capacity additions in its history. In Pecos, Texas, Microsoft Corporation plans to build a new data center campus, which further expands its global data center capacity by ~2 gigawatts (GW). This will help the tech giant to cater to robust and sustained demand for AI and cloud services throughout industries and regions.
Microsoft Corporation further noted that the multibillion-dollar datacenter campus investment over the upcoming 5 – 7 years demonstrates the immediate needs that are currently visible and the future trajectory of AI and advanced compute. As per the company, reliable infrastructure at scale remains critical to unlock the next generation of innovation.
The customer demand for AI and cloud services continues to elevate, ranging from startups developing new applications to governments, healthcare providers, and educational institutions that continue to modernize critical systems.
Microsoft Corporation is a global technology company that develops and sells a wide range of software, cloud services, devices, and business solutions, serving both individual users and enterprise customers worldwide.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 353
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Best Cloud Computing Stocks to Buy According to Hedge Funds. On June 22, ArcelorMittal announced a strategic collaboration with Amazon.com, Inc.’s Amazon Web Services (AWS), which can help accelerate the industrial automation throughout the global operations via advanced cloud, AI, and edge technologies. This brings AWS cloud and AI capabilities directly to ArcelorMittal’s manufacturing processes, and offers several opportunities for further optimisation.
Apart from the cloud and AI collaboration, Amazon.com, Inc. entered into a multi-year Supply Framework Agreement with ArcelorMittal, focusing on supplying structural steel throughout Europe and the United Kingdom. ArcelorMittal would be supplying lower-carbon XCarb® steel for use in Amazon operations facilities as well as AWS data centres. This will help Amazon.com, Inc.’s target to reach net-zero carbon by 2040. This agreement demonstrates the shared ambition of both companies to advance decarbonization of construction at scale.
Amazon.com Inc. operates across e-commerce, digital content, advertising, and cloud computing. Its online and offline stores offer both in-house and third-party products, while its Amazon Web Services (AWS) division runs one of the world’s largest data center networks.
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