5 Best Cloud Stocks To Buy Now

2. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 106

Alibaba Group Holding Limited (NYSE:BABA), the Chinese technology conglomerate, is one of the biggest players in cloud computing. Alibaba Cloud offers cloud computing services to online businesses and Alibaba’s own e-commerce universe. On September 23, the company said it would invest up to $1 billion over the next three years “for a global partner ecosystem upgrade” and support its cloud computing customers in an effort to elevate growth.

On August 8, Deutsche Bank analyst Leo Chiang raised the price target on Alibaba Group Holding Limited (NYSE:BABA) to $160 from $155 and maintained a Buy rating on the shares. The company’s second quarter net income and adjusted net margins exceeded consensus, mainly given a quicker than expected narrowing of losses in new initiatives, the analyst told investors in a research note. The analyst sees the current valuation as “defensive”, and noted a faster than anticipated macro recovery could deliver upside potential.

According to Insider Monkey’s Q2 data, Alibaba Group Holding Limited (NYSE:BABA) was part of 106 hedge fund portfolios, up from 100 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with 14.5 million shares worth $1.6 billion. 

Ensemble Capital recently published its Q2 2022 investor letter. Here is what the fund specifically said about ServiceNow, Inc. (NYSE:NOW): 

“ServiceNow is an enterprise software company that helps their corporate customers integrate all of their various software products into a unified platform. Their products are a key element of driving the digital transformation nearly every large company is undergoing. At the recent JP Morgan investor day, CEO Jamie Dimon explained that while the company could reduce expenses if needed should the economy slow, that their spending on digital transformation would continue as this spending was critical to the company managing costs and maximizing revenue over time. As an example of this type of spending, Dimon specifically pointed to ServiceNow, calling out that the company’s products now oversaw the single largest collection of JP Morgan data and highlighted that working with them had saved JP Morgan $50 million over the past few years.

While we have high expectations for ServiceNow’s long-term growth rate, at the company’s investor day in late May they offered an increased growth outlook for the next five years as they target even higher levels of growth than we have been expecting.”