When it comes to cloud-based services, it’s Amazon that still reigns supreme. However, not to far behind are Google and Microsoft, which all bodes well for investors in cloud computing exchange-traded funds (ETFs).
“According to a Gartner report, Amazon pulled in an estimated $20 billion in IaaS cloud revenue in 2019, leading with a 45% market share,” a TechRepublic article said. “Microsoft trailed behind in second place with a 17.9% slice of the market, netting the Redmond company just shy of $8bn in 2019. Microsoft was followed by Alibaba, Google, and Tencent. Altogether, the worldwide IaaS public cloud service market grew to $44.5bn in 2019, up 37.3% year-on-year.”
Cloud computing technology remains high on the priority list for many companies’ top brass. The demand for new, scalable technologies should continue to thrive moving forward as economies around the globe push past the Covid-19 pandemic.
“It enables technologies such as the edge, AI, machine learning, and 5G, among others. At the end of the day, each of these technologies requires a scalable, elastic, and high-capacity infrastructure platform like public cloud IaaS, which is why the market witnessed strong growth,” said Sid Nag, research vice president at Gartner.
Cloudy ETF Opportunities
The impact of cloud computing can be felt as more companies are utilizing the technology at a rapid pace to power their core businesses. That’s why Global X ETFs, the New York-based provider of exchange-traded funds, recently launched the Global X Cloud Computing ETF (Nasdaq: CLOU).
Seeking to track the Indxx Global Cloud Computing Index, the fund holds a basket of companies that potentially stand to benefit from the continuing proliferation of cloud computing technology and services. The cloud computing industry refers to companies that (i) license and deliver software over the internet on a subscription basis (SaaS), (ii) provide a platform for creating software applications which are delivered over the internet (PaaS), (iii) provide virtualized computing infrastructure over the internet (IaaS), (iv) own and manage facilities customers use to store data and servers, including data center Real Estate Investment Trusts (REITs), and/or (v) manufacture or distribute infrastructure and/or hardware components used in cloud and edge computing activities.
Another fund to consider is the WisdomTree Cloud Computing Fund (WCLD). The fund seeks to track the price and yield performance of the BVP Nasdaq Emerging Cloud Index, which is designed to track the performance of emerging public companies primarily involved in providing cloud computing software and services to their customers. It is non-diversified.
For more market trends, visit the ETF Trends.