5 Best Cloud Computing Stocks Heading into 2023

In this article, we will discuss the 5 best cloud computing stocks to buy heading into 2023. If you want to explore similar stocks, you can read 15 Best Cloud Computing Stocks Heading into 2023.

5. ServiceNow, Inc. (NYSE:NOW)

Number of Hedge Fund Holders: 103

ServiceNow, Inc. (NYSE:NOW) is a leading provider of cloud-based services and solutions in the enterprise software space, and it has seen tremendous growth in recent years. The company has a strong and growing customer base, which is reflected in its growing revenue and market share. Additionally, ServiceNow, Inc. (NYSE:NOW) has a strong balance sheet with low debt levels. ServiceNow, Inc. (NYSE:NOW) has free cash flows of $1.89 billion and a debt-to-equity ratio of 0.32, as of September 30. The company is also expanding into new markets and is investing heavily in research and development, which should provide a long-term boost to its growth prospects.

On November 17, Morgan Stanley named ServiceNow, Inc. (NYSE:NOW) as his “Top Pick” and reiterated an Overweight rating and his $520 price target on the shares.

At the end of Q3 2022, 103 hedge funds were long ServiceNow, Inc. (NYSE:NOW) and held stakes worth $4.26 billion. Of those, Tiger Global Management LLC was the top investor in the company and held a position worth $639.7 million.

Here is what Aristotle Atlantic Partners, LLC had to say about ServiceNow, Inc. (NYSE:NOW) in its third-quarter2022 investor letter:

“Underperformance in the third quarter can be attributed to ServiceNow, Inc. (NYSE:NOW)’s slight miss on the second quarter earnings and guidance that was lower than expected for its third quarter outlook. The company is facing headwinds from the weaker macroeconomic conditions and a tempered outlook resulting from elongated sales cycles and an overall slowing software spending environment. These worsening conditions were highlighted by many software companies during the second quarter earnings season. We expect this to be temporary for ServiceNow where the long-term thesis of the company’s platform strategy and relevance to digital transformation strategies remains intact. The stock was also likely impacted by the rapid increase in interest rates during the third quarter and the resulting contraction of multiples on high-growth software stocks.”