AI is enabling a digital transformation across most industries, and cloud services sit at the very center of this change. The industry continues to grow at a rapid pace, and if recent analyst remarks are anything to go by, it’s not stopping anytime soon.
Angelo Zeno, Senior Equity Analyst at CFRA Research, expects the industry to grow at over 30% over the next couple of years at least. However, he was quick to point out that success in the industry is now not about bookings, but the pace at which one can execute those deals. This suggests companies that are established players or lean enough to quickly adapt to customer needs will succeed. Here’s what he said while talking to Schwab Network:
“Cloud is a business that I think will continue to see north of 30% annualized growth here over the next two to three years…. I think you’re in an environment right now where I agree it’s not about bookings anymore, it’s about execution.”
On the same show, Shai Balour, who is the Chief Market Strategist at Futurum Equities, pointed out how Alphabet had successfully captured this growth. He said Google Cloud is now a second engine for the company. This should help Google diversify away from its ads business, which frequently faces regulatory and privacy challenges.
To identify which cloud companies hold the most promise in the coming months, we present our selection of the most promising cloud stocks according to analysts.
Our Methodology
To compile our list of the 10 most promising cloud stocks according to analysts, we identified stocks with a market cap of at least $2 billion that derive a significant portion of their revenue from cloud services or cloud computing infrastructure. We reviewed various financial media and ETFs to compile a list of these stocks. We then filtered for companies with at least 40% upside and ranked them by upside as of market close on January 28, using CNN’s compilation of analyst price targets. We have also included the number of hedge funds that hold the stock as of Q3 2025.
Why do we care about what hedge funds do? 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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Box, Inc. (NYSE:BOX)
Potential Upside: 43.56%
Number of Hedge Fund Holders: 35
On January 21, Citi analyst Steve Enders maintained his Buy rating on Box, Inc. (NYSE:BOX) stock, along with the price target of $40. The firm’s price target implies over 50% upside from the current levels.
Separately, on January 15, the company announced that Box Extract is now generally available. Leveraging advanced generative AI models from providers such as OpenAI, Google, and Anthropic, and paired with intelligent automated features, Box Extract enables enterprises to securely and intelligently extract critical information from their content and store it as metadata within Box.
A large number of companies have untapped data, and this product has made it easier than ever for the companies to utilize that data. With this platform, organizations can easily automate workflows, gain faster access to valuable information, and speed up decision-making.
Aaron Levie, co-founder and CEO of Box, explained how the product is beneficial:
”Enterprises are sitting on a gold mine of data in their untapped content. With Box Extract, that information is now unlocked and can transform how businesses analyze information and make decisions. By turning unstructured content into structured, usable data, organizations can deliver real-world impact by having their content actively work for them across their most important lines of business.”
Box, Inc. (NYSE:BOX) operates as a provider of a cloud content management platform. The company’s platform enables organizations of various sizes to share and manage their content from anywhere on any device across Japan and the US. Box, Inc. was founded in 2005 and is based in Redwood City, California.
9. Datadog, Inc. (NASDAQ:DDOG)
Potential Upside: 43.6%
Number of Hedge Fund Holders: 72
On January 22, Stifel upgraded Datadog, Inc. (NASDAQ:DDOG) from Hold to Buy, raising the price target to $205 from $160. The upgrade comes amid expectations of a strong Q4 earnings report. Similarly, on January 16, RBC Capital analyst Matthew Hedberg reaffirmed the firm’s price target of $175, along with a Buy rating on the stock. The firm’s price target implies a further 25% upside from the current levels.
However, Citi analyst Fatima Boolani lowered the firm’s price target on the stock from $200 to $175 while maintaining a Buy rating on January 15. The price target adjustment came as part of the firm’s broader update to price targets in the infrastructure software group tied to its 2026 outlook. The firm highlighted that the strong momentum seen across the sector during 2025 is anticipated to continue into 2026.
Pressured by concerns about potential category commoditization, OpenAI’s concentrated influence, and pricing headwinds, the stock has lagged recently. Analyst Fatima Boolani also noted the mixed investor sentiment toward the stock and said:
”From our investor discussions, we’ve also sensed mixed views on the aggregate AI-native exposure, which, while clearly attractive and corroborating DDOG’s status as an ‘AI Winner’ is also being perceived more measuredly, given business cycle volatility and outsized churn risk considerations in this crop of customers – almost akin to the ZIRP-era startups to whom DDOG had exposure.”
Datadog, Inc. (NASDAQ:DDOG) operates a security and observability platform for cloud applications. It offers a comprehensive suite of products, including log management, continuous profiler, data observability, network monitoring, error tracking, digital experience monitoring, infrastructure & application performance monitoring, and others.
8. Salesforce, Inc. (NYSE:CRM)
Potential Upside: 46.96%
Number of Hedge Fund Holders: 119
Salesforce, Inc. (NYSE:CRM) and the US Army reached an agreement on January 26, which will enable the company to improve the Pentagon’s data analytics capabilities and deploy AI agents. It is an indefinite-delivery, indefinite-quantity (IDIQ) contract worth up to $5.6 billion, with a 5-year optional extension period. In a press release, the company said the following about the deal:
”Through the new contract, the Army and the DOW can leverage Salesforce’s trusted data fabric and compliant cloud technologies as the foundation for its agentic enterprise and accelerate decision-making, optimize operations, and improve support for millions of warfighters, civilian personnel, industrial base partners, and dependents.”
On January 20, Deutsche Bank analyst Brad Zelnick lowered the firm’s price target for Salesforce, Inc. (NYSE:CRM) stock from $360 to $325 while maintaining a Buy rating. The revised price target still offers a further 43% upside from the current levels. This upside is consistent with the median Wall Street analysts’ upside estimate of 51% based on 58 analysts covering the stock.
Salesforce, Inc. (NYSE:CRM) operates as a provider of customer relationship management technology. The company’s technology connects global customers and companies. It offers Agentforce, Salesforce Starter, Slack, Tableau, Industries AI, and integration and analytics solutions. The company was founded in 1999 and is based in San Francisco, California.
7. Zeta Global Holdings Corp. (NYSE:ZETA)
Potential Upside: 47.71%
Number of Hedge Fund Holders: 46
On January 28, Goldman Sachs raised its price target on Zeta Global Holdings Corp. (NYSE:ZETA) from $23 to $26 while maintaining a neutral rating on the stock. Elsewhere, as part of Morgan Stanley’s broader outlook for the Application SaaS sector, the firm updated its price target for Zeta Global on January 15. Elizabeth Porter of Morgan Stanley increased the firm’s price target from $23 to $27 while maintaining a Buy rating. Although the Application SaaS sector underperformed in 2025, the analyst expects AI-related risks to ease, supporting a more constructive view for 2026.
The stock is still trading below the lowest Wall Street price target of $25 and has 23% upside from here, according to the most bearish of the 14 analysts covering it.
Additionally, on January 13, Canaccord Genuity analyst David Hynes reiterated his Buy rating, along with the price target of $30 for the stock. The rating is based on the company’s strong execution and momentum in early 2026, a new collaboration with OpenAI that strengthens the Athena platform, and positive feedback from CES 2026.
Zeta Global Holdings Corp. (NYSE:ZETA) is a provider of an omnichannel, data-driven cloud platform. Its platform offers enterprises consumer intelligence and marketing automation software. The company also provides different types of product suites, including an agile intelligence suite.
6. Nebius Group N.V. (NASDAQ:NBIS)
Potential Upside: 51.85%
Number of Hedge Fund Holders: 65
On January 20, Nebius Group N.V. (NASDAQ:NBIS) was selected by the Israel Innovation Authority to operate and develop the company’s national supercomputer infrastructure as part of a state initiative supporting AI. The firm won the contract following a competitive process, with the systems already operational and ready to deploy 1,000 Nvidia B200 accelerators.
The use of the company’s technology alongside Nvidia’s high-performance GPUs highlights the reliability and quality of its products, signaling strong market validation. The project improves the company’s credibility and positions it at the center of Israel’s AI ecosystem.
Dror Bin, CEO of the Israel Innovation Authority, commented:
”The launch of the national supercomputer for use by industry and academia is a key step in strengthening Israel’s R&D infrastructure for artificial intelligence. This initiative is designed to enable the development and training of large models in Israel, accelerate industrial and research innovation, and strengthen Israel’s ability to continue leading in the global technological race.”
Morgan Stanley started coverage of the stock with a Hold rating on January 15. Analyst Josh Baer assigned a $126 price target to the shares, implying a further 32.56% upside from current levels. The firm cited strong external validation for Nebius’ vertically integrated artificial intelligence cloud platform, supported by the presence of key reference customers.
Nebius Group N.V. (NASDAQ: NBIS) is a technology company. The company is involved in building full-stack infrastructure to service the global AI industry across the Netherlands, North America, Europe, and Israel. It offers full-stack AI infrastructure, including cloud platforms, large-scale GPU clusters, and developer tools and services.
5. Nutanix, Inc. (NASDAQ:NTNX)
Potential Upside: 55.58%
Number of Hedge Fund Holders: 47
Barclays analyst Tim Long downgraded the stock from Overweight to Equal Weight on January 15. He also lowered the firm’s price target for the shares from $64 to $53. The downward revised price target offers a further 26% upside from the current levels.
According to the analyst, the company is in the “middle innings” of its opportunity to gain market share from VMware. The firm’s outlook indicates that, although the company still has potential in the VMware displacement market, growth is slowing, which could limit its ability to sustain the rapid momentum.
Additionally, on January 12, Morgan Stanley analyst Sanjit Singh also downgraded the stock from Overweight to Equal Weight. He reduced the firm’s price target for the shares from $82 to $62. The adjusted price target offers a further 47.6% upside from current levels, which is consistent with the median Wall Street analysts’ upside of 50% based on 17 analysts covering the stock.
In a research note to investors, the analyst acknowledged that the company remains an attractive business, having reached a scale of over $2.5 billion in revenue. However, heading into 2026, the firm believes visibility into the company’s top-line growth is declining, creating short-term uncertainty. Despite this, the analyst pointed out that the firm continues to view Nutanix’s long-term growth prospects positively.
Nutanix, Inc. (NASDAQ:NTNX) provides an enterprise cloud platform across Asia Pacific, Latin America, North America, the Middle East, Europe, and Africa. The company offers Nutanix cloud infrastructure, hyperconverged infrastructure software, Nutanix AHV, flow network security, Nutanix data services for Kubernetes, Nutanix Cloud Clusters, and others.
4. ServiceNow, Inc. (NYSE:NOW)
Potential Upside: 58.15%
Number of Hedge Fund Holders: 104
ServiceNow, Inc. (NYSE:NOW) received support from Jefferies analyst Samad Samana on January 26, when he maintained his Buy rating and $175 target price.
Separately, on January 20, ServiceNow and OpenAI announced a multi-year strategic partnership to deliver agentic AI for enterprises. The collaboration gives customers direct access to OpenAI frontier models, including GPT-5.2. It also enables custom ServiceNow AI solutions without the need for bespoke development. Moreover, the partnership supports speech-to-speech and native voice capabilities to enhance automation and create more natural interactions.
Amit Zavery, president, CEO, and chief product officer at ServiceNow, commented:
”ServiceNow leads the market in AI-powered workflows, setting the enterprise standard for real-world AI outcomes. With OpenAI, ServiceNow is building the future of AI experiences: deploying AI that takes end-to-end action in complex enterprise environments. As companies shift from experimenting with AI to deploying it at scale, they need the power of multiple AI leaders working together to deliver faster, better outcomes. Bringing together our respective technologies will drive faster value for customers and more intuitive ways of working with AI.”
On January 19, the financial services firm TD Cowen also reiterated its Buy rating on the stock. However, TD Cowen analyst Derrick Wood lowered the firm’s price target for the stock from $250 to $200.
ServiceNow, Inc. (NYSE:NOW) provides cloud-based solutions for digital workflows across the Middle East and Africa, North America, Asia-Pacific, and Europe. The company offers integrated risk management, Operational Technology management, asset management, IT service management, strategic portfolio management, and other services. It serves the Public Sector, technology, financial services, healthcare & life sciences, IT services, Telecommunications, retail, government, and manufacturing sectors.
3. Oracle Corporation (NYSE:ORCL)
Potential Upside: 64.93%
Number of Hedge Fund Holders: 122
Morgan Stanley, in an update issued on January 23, lowered its target price on Oracle Corporation (NYSE: ORCL) from $320 to $213. The stock is currently trading about 19% below this level. The investment firm is confident that the company will succeed in its massive GPU-as-a-Service (GPUaaS) opportunity. However, the capital-intensive buildup required to successfully provide this service is likely to drive short-term earnings downward.
On January 20, Guggenheim analyst John Difucci maintained a Buy rating on the stock, along with the price target of $400. The firm views Oracle as a long-term growth story, anticipating hyper-EPS growth and substantial free cash flow over the coming decade.
In another major development, under a transaction that closed on January 22, Oracle, PE firm Silver Lake Management, and Abu Dhabi-based MGX will each own a 15% stake in TikTok’s US entity. This ownership stake positions Oracle to benefit, as it has been a cloud computing partner to TikTok for many years and, according to some reports, has been designated as the Trusted Technology Partner. A Bloomberg report on the development said that “Oracle will serve as a security guard charged with ensuring TikTok complies with the law.” With this development, Oracle is well-positioned to benefit from TikTok’s cloud computing and infrastructure needs.
Oracle Corporation (NYSE:ORCL) provides a range of products and services to support enterprise IT environments across the globe. The company’s Oracle cloud software as a service offering consists of different cloud software applications, such as Oracle Fusion cloud enterprise performance management EPM, Oracle Fusion cloud enterprise resource planning ERP, Oracle Fusion cloud human capital management HCM, and others.
2. Wix.com Ltd. (NASDAQ:WIX)
Potential Upside: 71.97%
Number of Hedge Fund Holders: 71
Capitalizing on the decline in its share price over the past year, Wix.com Limited (NASDAQ:WIX) management announced a $2 billion share repurchase program on January 28. Although this comes amid analysts lowering their price targets on the stock. On January 15, Morgan Stanley analyst Elizabeth Porter reiterated her Buy rating on the stock while lowering the firm’s price target from $181 to $160. The downward-adjusted price target still offers an attractive upside of around 100% from the current levels. This upside is equal to the median estimate from 25 analysts covering the stock.
In a look-ahead note covering the group, the analyst highlighted that Application Software-as-a-Service companies underperformed both the overall technology sector in 2025 and the broader software sector. However, the firm pointed out that evidence increasingly suggests that the risk tied to AI may turn out to be less severe than originally expected. This view supports a more constructive outlook for the Application Software-as-a-Service stocks heading into 2026. At the same time, the analyst also cautioned that the ongoing absence of widespread positive revisions to customer spending forecasts is limiting enthusiasm.
In addition to Morgan Stanley, Citi maintained its Buy rating and $150 price target for the stock on January 14. The firm’s price target implies a further 87% upside from current levels, consistent with the median Wall Street analyst estimate of 99.6%.
The stock slump in the past one year has brought the stock down to attractive levels, so much so that it is now a cheap stock on forward P/E basis with huge upside potential according to analysts.
Wix.com Ltd. (NASDAQ:WIX) offers a cloud-based web development platform for registered users and creators worldwide. It provides Wix Studio, Wix Editor, Velo by Wix, Wix App Market, Wix marketplace, Spaces by Wix mobile app, and Wix Customer Care. The company was founded in 2006 and is based in Tel Aviv, Israel.
1. HubSpot, Inc. (NYSE:HUBS)
Potential Upside: 76.59%
Number of Hedge Fund Holders: 63
On January 27, Cantor Fitzgerald analyst Matthew VanVliet maintained a Buy rating on HubSpot, Inc. (NYSE:HUBS). He has a price target of $775 on the stock. A couple of weeks prior to that, Elizabeth Porter of Morgan Stanley reduced the firm’s price target on the stock from $640 to $577, while reaffirming a Buy rating, on January 15. The revised price target implies a further 82% upside from current levels, consistent with the median Wall Street analyst estimate of 75%, based on 37 analysts covering the stock.
Another development that would boost investors’ confidence happened on January 15. Raymond James said that it hosted a webinar with the company’s Elite partner, who pointed out a strong close to 2025, with growth of about 35%. The partner highlighted that the main source of strength came from larger customers.
RBC Capital, in addition to Morgan Stanley, also maintained its Buy rating on the stock on January 13. Analyst Rishi Jaluria also kept the firm’s price target of $800 for the shares, implying a compelling 152% upside from here.
HubSpot, Inc. (NYSE:HUBS) operates as a provider of a cloud-based customer relationship management (CRM) platform for businesses. Its platform consists of Sales Hub, Marketing Hub, Service Hub, and Content Hub. The company also offers Commerce Hub and Operations Hub. It was founded in 2005 and is headquartered in Cambridge, Massachusetts.
While we acknowledge the potential of HUBS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than HUBS and that has 100x upside potential, check out our report about this cheapest AI stock.
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