The market rally might be taking a breather in the month of August, but the growth prospects of cloud computing look promising in the long-term horizon. That said, traders could take advantage of the recent pullback and capitalize on future strength.
One of the prime market plays for leveraging the strength of cloud computing is Microsoft. The software company looks poised to compete with its big tech peers like Amazon and Google in terms of bolstering its cloud computing products.
Thus far, it appears its cloud computing efforts are starting to make an impact.
“Microsoft’s greater goal of evolving beyond a software developer for desktops at home and work seems to be bearing fruit,” a Direxion Xchange newsletter noted. “Its focus on developing its cloud business has rewarded the company with over $22 billion in revenue.”
Furthermore, the company is making key acquisitions to help its future growth prospects by adding other avenues of income streams.
“Management, led by CEO Satya Nadella, is putting this cash flow to work,” the newsletter added further. “The deal to acquire Activision Blizzard seems to finally be pushing through after several regulatory headwinds. This should help continue to drive bottom line growth as management targets 10% annual revenue growth over the next several years.”
That said, traders have the option to add extra leverage to their bullish Microsoft trades with single-stock exchange traded funds (ETFs). In particular, Direxion offers the Direxion Daily MSFT Bull 1.5X Shares (MSFU) for an added dose of leverage without having to utilize a margin account.
A Broad Trade on Cloud Computing
While all the rage in the tech trade is artificial intelligence (AI), cloud computing has already been a mainstay in the disruptive space. As such, for traders looking to capitalize on further cloud strength, they can consider the Daily Cloud Computing Bull and Bear 2X Shares ETFs (CLDL), which seeks 200% of the daily performance of the Indxx USA Cloud Computing Index.
“Cloud computing is the hottest tech market trend this side of artificial intelligence, and – unlike AI – it’s already a big business for which corporate users already have a good use case,” a U.S. News report noted. “So, naturally, some exchange traded funds, or ETFs, have sprung up to give investors a way to bet on the shift of computing dollars away from servers that companies manage in-house to hardware and software that’s centrally managed by third-party administrators to save money and add flexibility.”
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