In this article, we are going to look at the 5 Best Cloud Computing Stocks to Buy According to Hedge Funds. For a longer list and more details on how we picked these stocks, you can go to 10 Best Cloud Computing Stocks to Buy According to Hedge Funds.
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 (NYSE:BABA) 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 (NYSE:BABA) 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 (NYSE:ORCL) 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 (NYSE:ORCL) 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. (NASDAQ:GOOGL) has a long history in AI, giving the company an edge over its competitors.
Furthermore, the analyst added that Alphabet Inc. (NASDAQ:GOOGL) 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. (NASDAQ:GOOGL) in training and running AI models at a reduced cost. Also, it provides more control over the AI infrastructure.
Alphabet Inc. (NASDAQ:GOOGL) 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT) 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 (NASDAQ:MSFT) 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. (NASDAQ:AMZN)’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. (NASDAQ:AMZN) 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. (NASDAQ:AMZN)’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. (NASDAQ:AMZN) 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.
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 the cheapest AI stock.
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