The Nasdaq 100 is down over 30% for the year, but cloud computing investment continues, highlighting the growth of the sub-industry despite the overall market weakness.
More and more businesses are looking to utilize the cloud as part of their core operations. Within the next few years, research firms are already predicting massive growth for spending in cloud computing.
According to a ZDNet article, research, consulting, and advisory firm Gartner “predicts that as much as half of spending across application software, infrastructure software, business process services and system infrastructure markets will have shifted to the cloud by 2025, up from 41% in 2022. It estimates that almost two-thirds of spending on application software will be via cloud computing, up from 57.7% in 2022.”
The start of the pandemic a couple of years ago only fueled the need for the cloud, underscoring how businesses can move their operations online efficiently. Even the re-opening of the economy hasn’t swayed businesses from continuing to pour investment capital into cloud technology, which opens up opportunities in cloud exchange traded funds (ETFs).
Get Cloud Computing Exposure in 1 ETF
As opposed to getting cloud exposure through various stock holdings, there’s an easier way via 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 technology and services.
The cloud 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 services surged during the pandemic and seems unlikely to abate as work, school, and social activities move 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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