We recently compiled a list of the 12 Best Cloud Computing Stocks to Buy According to Analysts. In this article, we are going to take a look at where Domo, Inc. (NASDAQ:DOMO) stands against the other cloud computing stocks.
Cloud computing enables companies to store their infrastructures remotely using the Internet, ultimately reducing costs and creating value. As per Gartner, worldwide end-user spending on public cloud services is expected to reach $723.4 billion in 2025, reflecting a rise from $595.7 billion in 2024. The use of Al technologies in IT and business operations continues to accelerate the role of cloud computing in helping operations and outcomes. The cloud use cases have been expanding with an increased focus on distributed, hybrid, cloud-native, and multi-cloud environments, aided by a cross-cloud framework, which should make the public cloud services market achieve a growth rate of 21.5% in 2025.
Gartner believes that 90% of organizations will adopt a hybrid cloud approach through 2027. Resultantly, all segments of the cloud market should see a double-digit growth rate in 2025 demonstrating how I&O (Infrastructure and Operations) leaders remain focused on effectively integrating I&O into their GenAl strategies and laying the groundwork for running Al and GenAl infrastructure at the edge.
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Key Trends to Watch Out in 2025
Moving forward, the concept of cloud computing is expected to change because of technological enhancements and dynamic business requirements. As per Nasscom Community, quantum computing integration, AI-driven cloud services and multi-cloud, and interoperability are some of the future trends in cloud computing. The emerging field of quantum computing focuses on changing how data processing is done because it can handle even the most complicated computations that some other conventional systems cannot solve. Over the next 5 years, more cloud services are expected to offer its clients quantum computing capabilities, which should in turn help in cryptography, drug development, material science, and optimization.
AI and ML are some of the leading technologies behind innovation in the cloud. Nasscom Community believes that pervasive AI is expected to be in each layer of the cloud system, right from the server level to the customer service level by 2025. Moving forward, AI algorithms should help in predictive analysis and, therefore, prevent problems that can arise with infrastructure, control workload, and reduce automation of tedious tasks.
Future developments in the cloud computing field are expected to enhance the multi-cloud strategies involving using more than one cloud service provider between the business and the cloud altogether. Notably, distributing workloads among several cloud providers would help enterprises maximize cost and performance. The businesses have been dividing their workload across multiple cloud service providers in a bid to control data and resources and use the strength of each cloud service provider.
Our Methodology
To list the 12 Best Cloud Computing Stocks to Buy According to Analysts, we conducted extensive research and sifted through several online rankings. After getting the initial list of 18 stocks, we chose the ones that were popular among hedge funds and that analysts saw the most upside to. Next, the stocks were arranged in ascending order of their average upside potential, as of 10th January. We also mentioned the hedge fund sentiment around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A view of the company’s cloud-based business intelligence platform in use.
Domo, Inc. (NASDAQ:DOMO)
Number of Hedge Fund Holders: 15
Average Upside Potential: 39.7%
Domo, Inc. (NASDAQ:DOMO)’s cloud-based platform enables businesses in integrating, visualizing, and analyzing data. The company has been pursuing several strategic initiatives to strengthen its market position and drive growth. For example, its emphasis has been on transition to a consumption-based revenue model. To be precise, this means garnering revenue on the basis of actual usage of its platform, and not via fixed subscription fees.
This shift demonstrated healthy results and continues to contribute to Domo, Inc. (NASDAQ:DOMO)’s Annual Recurring Revenue (ARR). In Q3 2025, 100% of the company’s new logo deals were structured as consumption contracts, which now represent 55% of its ARR. By year-end, the company expects this to reach over 60%. The flexibility has made Domo, Inc. (NASDAQ:DOMO)’s services more accessible to a broader range of organizations. The company has been forming partnerships with cloud data warehouse providers like Snowflake and Databricks, which should help it improve lead flow and expand market reach.
By integrating with well-established cloud data warehouses, Domo, Inc. (NASDAQ:DOMO) can tap into a larger customer base, potentially fueling user adoption and revenue growth. Such alliances should help boost lead flow, potentially reducing customer acquisition costs and improving sales efficiency. Domo, Inc. (NASDAQ:DOMO) has also been investing in innovation, mainly in agentic AI capabilities, to enhance product offerings and sustain its competitiveness in the ever-evolving business intelligence market.
Overall DOMO ranks 2nd on our list of the best cloud computing stocks to buy according to analysts. While we acknowledge the potential of DOMO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than DOMO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.