The recent weakness in tech stocks isn’t stopping the world’s largest players in the space from investing in cloud computing. Chinese internet giant Alibaba is ready to pour $1 billion to bolster its own cloud computing technology.
“Alibaba said it will invest $1 billion over the next three fiscal years to support its cloud computing customers as the Chinese e-commerce giant looks to reignite growth after a historical slowdown,” a CNBC report said, noting that Alibaba is the third largest cloud computing player next to other big tech names in the U.S. like Microsoft and Amazon.
This can open a pathway toward investment in cloud computing companies domiciled in China, which is a plus for the Global X MSCI China Information Technology ETF (CHIK). CHIK tries to reflect the performance of the large- and mid-capitalization segments of the MSCI China Index that are classified in the information technology sector as per the Global Industry Classification System.
CHIK provides investors with:
- Targeted Exposure: CHIK is a targeted play on the Information Technology Sector in China – the world’s second-largest economy by GDP.
- ETF Efficiency: In a single trade, CHIK delivers access to dozens of information technology companies within the MSCI China Index, providing investors an efficient vehicle to express a sector view on China.
- All Share Exposure: The Index incorporates all eligible securities as per MSCI’s Global Investable Market Index Methodology, including China A, B, and H shares, red chips, P chips, and foreign listings, among others.
An ETF Option for Cloud Computing Growth
Additionally, ETF investors have an opportunity to capture cloud computing growth potential with the Global X Cloud Computing ETF (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 that are delivered over the internet (PaaS), (iii) provide virtualized computing infrastructure over the internet (IaaS), (iv) own and manage facilities that 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.
CLOU gives investors:
- High growth potential: The global cloud services market increased by 11% from 2019 to 2020, exceeding $270 billion. Forecasts suggest that the market could reach nearly $400 billion by 2022.
- Structural tailwinds: Demand for cloud computing services surged during the pandemic and seems unlikely to abate, as work, school, and social activities moved increasingly to digital experiences.
- Unconstrained approach: Cloud computing spans multiple segments, and its most innovative companies include both household names and newcomers from around the world. CLOU invests accordingly, without regard for sector or geography.
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