5 Cloud Computing Stocks to Buy According to Cathie Wood

4. Twilio Inc. (NYSE:TWLO)

Number of Hedge Fund Holders: 96

Twilio Inc. (NYSE:TWLO) is an American cloud communications platform that allows web developers to programmatically carry out communications using the company’s web service APIs. Recently, Barclays upgraded Twilio Inc. (NYSE:TWLO) to Overweight, with a $375 price target, presenting a 35% upside. Following the firm’s upgrade, the stock surged 3% on December 9.

At the end of Q3, 96 hedge funds in Insider Monkey’s database reported owning a $6.3 billion worth of stake in Twilio Inc. (NYSE:TWLO). In the preceding quarter, 98 hedge funds held stakes in the company, valued at $7.89 billion.

ARK Investment Management made its first investment of $209,000 in Twilio Inc. (NYSE:TWLO) during the fourth quarter of 2016. In Q3 2021, the company constitutes 2.48% of Cathie Wood’s portfolio. In Q3, Twilio Inc. (NYSE:TWLO) posted an EPS of $0.01, beating the consensus by $0.15.

RiverPark Funds mentioned Twilio Inc. (NYSE:TWLO) in its Q3 2021 investor letter. Here is what the firm has to say:

TWLO shares were also a top detractor for the quarter. Just like after 1Q, despite another quarterly beat in 2Q, management guidance–which we believe to be conservative–disappointed some investors. Second quarter revenue of $669 million was up 67% year over year, significantly exceeding management’s guidance of 47%-50% revenue growth. Management guided 3Q21 revenue to 50%-52% revenue growth, which was ahead of expectations, but due to continued investment also guided to a non-GAAP operating loss of $25 million-$30 million, which was below the Street’s forecast of a $12 million loss.

The COVID crisis has accelerated the adoption of the company’s cloud-based, integrated communications platform that allows companies in a wide range of businesses to embed digital communications capabilities (video, chat, voice, SMS, fax, and email) into their customer facing applications without needing to build back-end infrastructure and interfaces. Twilio’s total addressable market is now greater than $40 billion, which should grow by 50% over the next few years, providing a strong secular tailwind for the company. We expect the company’s gross margin to continue to expand from 54% in the second quarter toward management’s long-term goal of 60%-65%, and, as the company grows to scale, we expect its non-GAAP operating margin to expand to 25%.”