In this article, we will discuss the 13 Best Cloud Computing Stocks to Invest in Now.
McKinsey believes that the rapid evolution of AI continues to reshape the entire cloud infrastructure landscape, ranging from semiconductors to data center design. As enterprises deploy AI-powered workloads, key challenges arise related to power constraints and shifting supply chains. Notably, increased demand for AI computing has prompted deeper collaboration among chip developers, cloud providers, and infrastructure manufacturers.
Key Trends in Broader Cloud Computing Market
McKinsey noted that hyperscalers’ advances in hardware accessibility, along with investments from big organizations, allowed smaller players to enter the cloud market and grow. The availability of advanced computing chips, including GPUs and specialized AI accelerators, empowered such emerging providers to innovate in niche areas.
With the help of cutting-edge hardware, new entrants can provide differentiated services like AI-optimized cloud platforms or edge computing solutions catering to specific customer needs. This transition has been creating new market opportunities and fostering competition, fueling innovation throughout the cloud industry. Precedence Research highlighted that the global cloud computing market size was valued at US$753.11 billion in 2024 and is expected to reach ~US$5,150.92 billion by 2034.
Amidst such trends, we will now have a look at the 13 Best Cloud Computing Stocks to Invest in Now.
A close up view of a laptop computer, the cloud computing platform displayed on the screen.
Our Methodology
To list the 13 Best Cloud Computing Stocks to Invest in Now, we sifted through several online rankings to shortlist the stocks catering to the broader cloud computing space. Finally, we selected the ones popular among hedge funds. We also mentioned hedge fund sentiments around each stock, as of Q1 2025. The stocks are arranged in 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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13 Best Cloud Computing Stocks to Invest in Now
13. Rackspace Technology, Inc. (NASDAQ:RXT)
Number of Hedge Fund Holders: 13
Rackspace Technology, Inc. (NASDAQ:RXT) is one of the Best Cloud Computing Stocks to Invest in Now. On August 5, the company announced the launch of the Rackspace Cloud Management Platform, which includes next-gen upgrades to the Rackspace Managed Cloud (RMC) offering. The platform offers customers a single framework that tends to leverage best-in-class AI-enabled tools, bolstering companies to streamline workload operations, ramp up digital transformation, and more efficiently manage modern hybrid and multicloud environments.
Rackspace Technology, Inc. (NASDAQ:RXT) stated that go‑to‑market execution throughout both business units was strong in Q2 2025, demonstrating progress in its turnaround. Bookings saw an increase of 16%, with operating profit increasing 34% YoY. Also, Rackspace Technology, Inc. (NASDAQ:RXT) delivered positive operating cash flow. In Q2 2025, its cash flow from operating activities came in at $8 million.
For Q3 2025, Rackspace Technology, Inc. (NASDAQ:RXT) expects total revenue in the range of $660 million – $674 million, with private cloud revenue of between $246 million – $254 million and public cloud revenue of $414 million – $420 million.
Rackspace Technology, Inc. (NASDAQ:RXT) operates as a cloud and AI solutions company.
12. Rumble Inc. (NASDAQ:RUM)
Number of Hedge Fund Holders: 16
Rumble Inc. (NASDAQ:RUM) is one of the Best Cloud Computing Stocks to Invest in Now. On August 5, Rumble Inc. (NASDAQ:RUM) and Cumulus Media announced a multi-pronged strategic partnership, recognizing the evolution of podcasting and video in the current media landscape. Furthermore, the collaboration is expected to unlock new opportunities throughout Cumulus Media radio stations, Westwood One, the Cumulus Podcast Network, and Rumble.com, which includes enhanced distribution of content from both companies.
As per the agreement, Rumble Inc. (NASDAQ:RUM) and Westwood One would be collaborating to maximize advertising opportunities for brand partners, packaging assets throughout each portfolio in order to create unique and exclusive multi-platform solutions. With its fortified balance sheet, numerous tailwinds, and the closing of Tether, Rumble Inc. (NASDAQ:RUM) has entered a new era. Amidst increased cloud adoption throughout industries, Rumble Cloud remains well-placed to benefit, thanks to its compelling value proposition, improved enterprise presence, and meaningful partnerships.
Rumble Inc. (NASDAQ:RUM) operates video sharing platforms and cloud services. The company provides Rumble Cloud, which is an infrastructure-as-a-service offering, providing computing, storage, security, and networking services.
11. DigitalOcean Holdings, Inc. (NYSE:DOCN)
Number of Hedge Fund Holders: 20
DigitalOcean Holdings, Inc. (NYSE:DOCN) is one of the Best Cloud Computing Stocks to Invest in Now. On August 6, Canaccord upped the price target on the company’s stock to $49 from $45, while keeping a “Buy” rating, as reported by The Fly. As per the firm, DigitalOcean Holdings, Inc. (NYSE:DOCN) delivered Q2 2025 results with continued robust top-line momentum aided by favourable demand signals throughout the business, with 70+ competitive cloud migrations and AI/ML revenue more than doubling YoY.
In Q2 2025, DigitalOcean Holdings, Inc. (NYSE:DOCN)’s total revenue saw an increase of 14% YoY, and it achieved the highest incremental ARR since Q4 2022. DigitalOcean Holdings, Inc. (NYSE:DOCN) has been effectively balancing increased growth and attractive FCF margins. Notably, its adjusted FCF amounted to $57 million at a 26% margin. DigitalOcean Holdings, Inc. (NYSE:DOCN) raised full-year revenue guidance to $888 million to $892 million. DigitalOcean Holdings, Inc. (NYSE:DOCN)’s remaining performance obligation amounted to $53 million as compared to $3 million in Q2 2024.
Frontier Capital Management, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“The market volatility has created several opportunities to invest in companies at prices we find attractive, and thus we have initiated new positions in a variety of industries. Examples include CACI International Inc Amentum Holdings, Inc., Essential Properties Realty Trust, Inc., and DigitalOcean Holdings, Inc. (NYSE:DOCN). DigitalOcean’s new CEO has increased investment in its service offering, which should enable the company to grow its share of wallet and reduce churn in the customer base. As use cases for AI develop, we expect more developers will use DigitalOcean’s services to build their businesses in a more cost effective manner, driving increasing earnings for years to come.”
DigitalOcean Holdings, Inc. (NYSE:DOCN) operates a cloud computing platform.
10. Domo, Inc. (NASDAQ:DOMO)
Number of Hedge Fund Holders: 20
Domo, Inc. (NASDAQ:DOMO) is one of the Best Cloud Computing Stocks to Invest in Now. On July 18, Stephens initiated coverage of the company’s stock with an “Overweight” rating and a price target of $19, as reported by The Fly. As per the firm analyst, Domo, Inc. (NASDAQ:DOMO) is the most buyable asset of the covered data infrastructure group. This is because it is independent of hyperscalers, and other DI players require BI functionality in order to compete with hyperscalers. Furthermore, the visibility in the future revenue growth continues to increase dramatically, added the analyst.
In Q1 2026, Domo, Inc. (NASDAQ:DOMO)’s total revenue came in at $80.1 million, with subscription revenue coming at $71.4 million. Furthermore, the subscription remaining performance obligations (RPO) amounted to $408.2 million as of April 30, 2025, reflecting 24% YoY growth. This was the first time that the company achieved a positive operating margin in a Q1. Domo, Inc. (NASDAQ:DOMO) saw a strong increase in pipeline activity generated by its ecosystem, a dramatic increase in sales efficiency, a significant lengthening of the contracts, and an acceleration in RPO growth. Domo, Inc. (NASDAQ:DOMO) posted a non-GAAP operating margin of positive 1%, reflecting an increase of 10 percentage points YoY.
Domo, Inc. (NASDAQ:DOMO) operates a cloud-based modern AI and data products platform.
9. The Trade Desk, Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 61
The Trade Desk, Inc. (NASDAQ:TTD) is one of the Best Cloud Computing Stocks to Invest in Now. The company announced financial results for Q2 2025, with revenue increasing to $694 million, up by 19% YoY, as the company continues to outpace the broader digital advertising market. The Trade Desk, Inc. (NASDAQ:TTD) highlighted that CTV remains its fastest-growing channel and there are no signs of slowing down. Notably, with its leadership in CTV and other areas like retail media, digital audio, identity, measurement, and data, the company has been winning more business with new and existing customers.
The overall growth in the cloud computing industry is expected to fuel growth for The Trade Desk, Inc. (NASDAQ:TTD) by enabling rapid data processing, advanced AI capabilities, and scalable infrastructure. Notably, these are important for delivering real-time, data-driven advertising. With companies shifting their marketing and ad operations to the cloud, The Trade Desk, Inc. (NASDAQ:TTD) can enhance its platform’s reach. Kokai continues to support advertisers in driving better results through integrating more data, utilising AI as a co-pilot, as well as unlocking the full potential of the first-party data.
Parnassus Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“The Trade Desk, Inc. (NASDAQ:TTD), a digital advertising technology platform, detracted after missing guidance for the first time since going public. While the company faces concerns over rising competition from Amazon, we maintain our conviction in the company’s leading technology and its independent platform.”
The Trade Desk, Inc. (NASDAQ:TTD) provides self-service cloud-based ad-buying platform.
8. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 84
Datadog, Inc. (NASDAQ:DDOG) is one of the Best Cloud Computing Stocks to Invest in Now. On August 7, the company released its Q2 2025 results, with 28% YoY revenue growth, $200 million in operating cash flow, and $165 million in FCF. As of June 30, 2025, the company had ~3,850 customers with ARR of $100,000 or more, reflecting a rise of 14% from about 3,390 as of June 30, 2024. Datadog, Inc. (NASDAQ:DDOG) sees an overall strong demand environment with an ongoing healthy pace of cloud migration and digital transformation, while churn remained low with gross revenue retention stable in the mid- to high 90s.
Datadog, Inc. (NASDAQ:DDOG) opines that AI is a tailwind as higher cloud consumption fuels increased usage of its platform. Furthermore, next-gen AI brings in new complexity and observability challenges. Datadog, Inc. (NASDAQ:DDOG)’s AI observability products help customers gain visibility and deploy with confidence throughout the entire AI stack, which includes GPU monitoring, LLM observability, AI agent observability, and data observability. For Q3 2025, the company expects revenue in the range of $847 million – $851 million, and non-GAAP operating income of $176 million – $180 million.
Baron Funds, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Within IT, performance was strongest in systems software, driven by Cloudflare, Snowflake, Zscaler, and Datadog, Inc. (NASDAQ:DDOG), and semiconductors led by NVIDIA, Taiwan Semiconductor (TSMC), and indie Semiconductor. Datadog’s shares had a correction of 43% during the first half. At the same time, we judged their reported financial results to be strong and improving. The company demonstrated success expanding into the lucrative enterprise segment with new logo annual contract value up 70% year-on-year and gross retention of existing logos exceeding 99%. Datadog is seeing success with AI native companies, serving 8 of the top 10 AI companies including OpenAI, Anthropic, Cursor, Scale AI, and Replit. Four of these customers tripled spending with Datadog in 2024. Datadog’s innovation velocity helps strengthen its platform, and underpins a long duration of growth, supported by continual annual share gains.”
7. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 94
Snowflake Inc. (NYSE:SNOW) is one of the Best Cloud Computing Stocks to Invest in Now. On July 17, Stephens initiated coverage of the company’s stock with an “Overweight” rating and a price objective of $261, as reported by The Fly. The firm sees AI as a large growth acceleration opportunity for Snowflake Inc. (NYSE:SNOW). The company delivered strong Q1 2026, with product revenue coming at $997 million, up 26% YoY, and remaining performance obligations totalling $6.7 billion.
Snowflake Inc. (NYSE:SNOW) continues to see healthy growth from the new product offerings. Both Snowpark and Dynamic Tables surpassed expectations in Q1 2026. Other areas of strength were the technology and retail sectors. Overall, Q1 2026 was a healthy one for bookings. Snowflake Inc. (NYSE:SNOW) added 451 net new customers, reflecting a growth of 19% YoY.
The company expects Q2 2026 product revenue of between $1.035 billion – $1.04 billion, demonstrating 25% YoY growth. Snowflake Inc. (NYSE:SNOW) anticipates a Q2 2026 non-GAAP operating margin of 8%. For FY 2026, it increased its revenue guidance to $4.325 billion, reflecting 25% YoY growth.
Artisan Partners, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Among our top Q2 contributors were Spotify, Snowflake Inc. (NYSE:SNOW) and Roblox. Snowflake is a leading cloud data warehouse and analytics platform benefiting from the ongoing shift away from on-premise infrastructure. Its cloud-native architecture enables greater scalability, faster performance and improved efficiency for businesses managing large data sets. We see upside as the new management team drives new product launches to improve its competitiveness and position the company to take advantage of growing demand for AI tools. Progress was on display in its earnings results, including 26% revenue growth, 124% net revenue retention and 606 customers with trailing 12-month product revenue exceeding $1 million. Early in the quarter, we saw the post-Liberation Day market correction as an opportunity to increase our position.”
Snowflake Inc. (NYSE:SNOW) offers a cloud-based data platform for various organizations.
6. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 97
Oracle Corporation (NYSE:ORCL) is one of the Best Cloud Computing Stocks to Invest in Now. On August 7, KPMG LLP announced new initiatives to support its customers in deploying and managing AI agents, which can transform enterprise data management and business processes. KPMG continues to make investments in AI and is helping organizations in creating and deploying AI agents to fit unique business needs with Oracle Cloud Infrastructure (OCI) Generative AI Service and Oracle AI Agent Studio for Fusion Applications.
Notably, the new initiatives follow KPMG’s launch of Workbench, which is a global AI platform designed for interoperable agent-to-agent communication. Workbench tends to integrate AI capabilities from Oracle Corporation (NYSE:ORCL)’s platforms, enabling clients to select an AI model or agent for the right task. In Q4 2025, Oracle Corporation (NYSE:ORCL)’s total revenues rose 11% YoY in USD and constant currency to $15.9 billion. Notably, the Cloud services and license support revenues rose 14% in USD and constant currency to $11.7 billion.
The Cloud license and on-premise license revenues increased 9% in USD and were up 8% in constant currency to $2.0 billion. Oracle Corporation (NYSE:ORCL) expects its total cloud growth rate—applications plus infrastructure—to increase from 24% in FY 2025 to more than 40% in FY 2026. Also, the Cloud Infrastructure growth rate is projected to rise from 50% in FY 2025 to more than 70% in FY 2026. Kovitz Investment Group Partners, LLC, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Oracle Corporation (NYSE:ORCL) continues to demonstrate strong traction in scaling its cloud infrastructure and applications businesses. Growth in contracted backlog exceeded expectations at +41% in FY25 and management is expecting it to more than double in FY26. Revenue growth is also expected to accelerate materially with management indicating they expect to exceed their prior targets for the next two years. Lastly, the company recently disclosed that their fiscal year is off to a strong start with multiple new cloud contracts signed already, including one that is expected to generate more than $30B in annual revenue beginning in FY28.”
5. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the Best Cloud Computing Stocks to Invest in Now. Analyst Saiyi He from CMB International Securities maintained a “Buy” rating on the company’s stock and has a price objective of $1,175.00. The analyst’s rating is backed by a combination of factors, such as ServiceNow, Inc. (NYSE:NOW)’s healthy financial performance and strategic positioning. The company posted a strong increase in its revenue and operating income for Q2 2025, exceeding the market expectations.
As per the analyst, this growth was mainly due to the AI-enhanced efficiencies and strategic marketing timing, resulting in a strong increase in subscription revenue and contract renewals. ServiceNow, Inc. (NYSE:NOW) posted total revenues of $3,215 million in Q2 2025, reflecting YoY growth of 22.5%. Also, ServiceNow, Inc. (NYSE:NOW)’s healthy demand for its AI solutions, despite the macroeconomic concerns, underscores the potential for continued growth, added He. Its AI-driven products saw significant adoption, with a healthy increase in deal counts and customer usage.
ServiceNow, Inc. (NYSE:NOW) launched the ServiceNow Protected Platform Singapore (SPP-SG), which is a new secure, regulatory-compliant cloud platform. This will accelerate AI innovation and strengthen data security for the Singapore government and regulated sectors. ClearBridge Investments, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“The Strategy’s select growth exposure increased during the quarter due to the strong performance of the higher-beta stocks in this growth bucket as well as the purchase of ServiceNow, Inc. (NYSE:NOW). The company provides an end-to-end software-as-a-service (SaaS) platform to help enterprise customers automate and standardize business processes in areas like IT, customer services, sales and data security. ServiceNow also has a monetizable generative AI product being adopted by its customers. We have liked the business for a long time and took advantage of the April selloff to establish a position.”
ServiceNow, Inc. (NYSE:NOW) is a critical player in the broader cloud computing space, which provides a platform for automation of digital workflows throughout IT, customer, employee, and business operations.
4. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 140
Salesforce, Inc. (NYSE:CRM) is one of the Best Cloud Computing Stocks to Invest in Now. On July 14, Bank of America Securities analyst Bradley Sills reaffirmed a “Buy” rating on the company’s stock with a price objective of $350. The positive outlook comes as the analyst sees a rebound in growth for its largest business, Service Cloud. The analysts led by Brad Sills mentioned that Service Cloud is expected to see better growth in the upcoming quarters.
The analysts also mentioned that their estimate for FY 2026 Service Cloud revenue stood at $9.7 billion, representing 25% of the total subscription revenue. As per the analysts, the Service Cloud growth has bottomed and can accelerate to 9% in the upcoming quarters and is expected to trend towards 12% longer term. Overall, the Sills and his team maintained their rating on Salesforce, Inc. (NYSE:CRM)’s stock, considering their view that top-line growth has bottomed and can reaccelerate from here.
The analysts believe that add-ons and Agentforce upsell are the growth drivers. With the US dollar weakening in Q1, Salesforce, Inc. (NYSE:CRM) anticipates a currency tailwind for the business. Salesforce, Inc. (NYSE:CRM) expects Q2 2026 revenue guidance of $10.11 billion – $10.16 billion, up 8% – 9% YoY and 7% – 8% in CC. Oakmark Funds, advised by Harris Associates, released its Q2 2025 investor letter. Here is what the fund said:
“Salesforce, Inc. (NYSE:CRM) is a leading technology company that offers a collection of software products aimed at providing businesses with a full front office productivity suite. We believe Salesforce is a wonderful business going through a transformation into a profitable, shareholder-focused enterprise. Since management announced their renewed focus on operating discipline a couple years ago, Salesforce’s margins have increased substantially. In our view, there is further room to improve as the company leverages its unique position to help businesses deploy AI and continues to restructure its sales organization. Since exiting our position in Salesforce in December, the stock price has declined by over 30% despite continuing to report fundamental results that are in line with our expectations. We were pleased to buy the stock, but we first established our position using a put writing strategy to lower our entry price. We believed the puts were overvalued as they implied that Salesforce was among the most volatile large companies, which was completely at odds with our assessment of its business value.”
3. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders (GOOGL): 227
Number of Hedge Fund Holders (GOOG): 164
Alphabet Inc. (NASDAQ:GOOGL) is one of the Best Cloud Computing Stocks to Invest in Now. On August 6, LivePerson announced the significant expansion of its partnership with Google Cloud to integrate its advanced AI capabilities directly into LivePerson Connected Experience Platform. The brands are expected to benefit from improved self-service and personalization capabilities, deeper insights into customer sentiment, as well as access to the latest large language models.
In Q2 2025, Alphabet Inc. (NASDAQ:GOOGL)’s consolidated revenues rose 14%, or 13% in constant currency, YoY to reach $96.4 billion, reflecting strong momentum throughout the business. Furthermore, Google Cloud revenues rose 32% to $13.6 billion, thanks to the growth in Google Cloud Platform throughout core GCP products, AI Infrastructure, and Generative AI Solutions. Overall, AI has been positively impacting every part of Alphabet Inc. (NASDAQ:GOOGL)’s business, fueling strong momentum.
Google Cloud operating income rose to $2.8 billion, with operating margin increasing from 11.3% to 20.7%. The expansion in cloud operating margin was backed by healthy revenue performance and continued efficiencies in the expense base, partially mitigated by increased technical infrastructure usage costs, including associated depreciation. Amidst increased AI investments, the focus remains on fueling improvements in productivity and efficiency to offset the growth in technical infrastructure-related expenses.
Oakmark Funds, advised by Harris Associates, released its Q2 2025 investor letter. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. The U.S.-headquartered technology company’s stock price rose relatively steadily throughout the period after it delivered solid first-quarter 2025 earnings and mega-cap tech stocks trended higher. Despite concerns around incremental competition, Google Search revenue grew low-double digits and was slightly ahead of consensus forecasts. Operating income was also ahead of expectations, with Alphabet improving margins even as the company continues to make substantial investments in AI. We believe the potential payoff from these investments across each of Alphabet’s business units remains underappreciated. After adjusting for the value of Google Cloud and Alphabet’s Other Bets, we believe the Search, YouTube and Android businesses are being valued at a low-teens price-to-earnings (P/E) multiple. We still see this as an attractive valuation.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) is one of the Best Cloud Computing Stocks to Invest in Now. Taking cues from the company’s Q4 2025 earnings call, it seems that the tech giant’s long-term cloud strategy revolves around quantum computing. Microsoft Corporation (NASDAQ:MSFT) believes that the next big accelerator in the cloud is expected to be Quantum.
As per Jason Zander, Executive Vice President, Microsoft Corporation (NASDAQ:MSFT), along with Atom Computing, the company continues to strive to build the world’s most powerful quantum computer, which applies Microsoft Corporation (NASDAQ:MSFT)’s advanced error correction to Atom Computing’s high-fidelity qubits.
For Q1 2026, the company expects that the Microsoft Cloud gross margin percentage should be ~67%, down YoY. This is because of the impact of the continuous scaling of its AI infrastructure. Microsoft Corporation (NASDAQ:MSFT) expects Q1 2026 capital expenditures to be more than $30 billion due to the continued healthy demand signals. For Intelligent Cloud, Microsoft Corporation (NASDAQ:MSFT) expects Q1 2026 revenue of between USD 30.1 billion – USD 30.4 billion, or growth of 25% to 26%, with ~1 point of benefit from FX. Notably, the revenue is expected to be driven by Azure.
Kovitz Investment Group Partners, LLC, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“We initiated a position in Microsoft Corporation (NASDAQ:MSFT) at the beginning of the year on the premise that cloud infrastructure revenues were set to accelerate as capital expenditures shifted to monetizable servers in favor of spending on datacenter buildouts. In its most recently reported results, the company reported a significant acceleration in Azure revenue growth and indicated that growth will sustain at these levels for the following quarter, which was several points above consensus expectations. Earnings estimates for the next several years moved higher as a result.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Best Cloud Computing Stocks to Invest in Now. On August 6, GitLab Inc. announced that it has signed a 3-year strategic collaboration agreement (SCA) with Amazon.com, Inc. (NASDAQ:AMZN)’s AWS. The agreement expands access to GitLab Dedicated, which is a single-tenant offering enabling companies in highly regulated industries, as well as the public sector, to leverage cloud infrastructure while, at the same time, catering to the complex compliance requirements, such as data residency, isolation, and private networking.
In Q2 2025, Amazon.com, Inc. (NASDAQ:AMZN)’s net sales rose 13% to $167.7 billion as compared to $148.0 billion in Q2 2024. AWS grew 17.5% YoY, with more than $123 billion annualized revenue run rate. Amidst a rapidly evolving world of generative AI, AWS has been building a large, fast-growing triple-digit YoY percentage multibillion-dollar business. Amazon.com, Inc. (NASDAQ:AMZN) expects that AWS operating margins might fluctuate over time, mainly because of the level of investments being made. There are expectations to continue the investment momentum in chips, data centers, and power in a bid to pursue the significant opportunity offered by generative AI.
Investment management company Vulcan Value Partners released its Q2 2025 investor letter. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN) is a dominant, world-class company with powerful secular tailwinds in place including its e-commerce penetration, digital advertising growth, and the transition to the cloud. Amazon reported strong results during the f irst quarter. The company’s stock rebounded during the second quarter.”
While we acknowledge the potential of AMZN to grow, 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 AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
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