Cloud Computing Is The Next Big Growth Driver

| October 25, 2011 | 0 Comments

One day, investors think it’s safe to invest, and stocks soar.

The next day, they think just the opposite… the markets are suddenly too risky, and stocks plunge.  It’s enough to make your head spin!

Here’s the thing…

No matter how much the market gyrates from one day to the next, stocks are still the best way to generate wealth over the long run.  And as far as I’m concerned, the best way to generate growth is to invest in companies with breakthrough technology.

Right now, it’s time to buy into the latest game-changing technology trend.

I’m sure you have heard about cloud computing.  It’s been a hot buzzword in the tech world over the last few years.  But you may not appreciate how much this technology is reshaping the way companies operate.

Here’s why…

In a nutshell, cloud computing changes technology from a product to a service.

It allows programs, software, and data storage to be centralized. Everything is stored out in the cloud.  And everything stored in the cloud is accessible over the internet via laptops, smartphones, and tablets.

Now, you’re probably thinking… that’s great, but why’s it important?

The simple answer is… cloud computing lowers the cost of implementing new tech-based solutions.

And when you dramatically lower costs the way cloud computing has, you have one thing… a breakthrough technology.  It’s no wonder tech companies who embrace the cloud have seen their stocks skyrocket.

Just look at the gains from some the leaders in cloud computing…

Over the last three years, (CRM) has gained more than 400%, Netsuite (N) has moved up more than 350%, and SuccessFactors (SFSF) has returned over 300%.

Even Big Blue has profited from the action.  IBM (IBM) is up more than 125% over the last three years in large part due to cloud computing!

Those are some massive gains to say the least…

Clearly, investing in the cloud has generated eye-popping growth over the last few years.  And here’s the best part… There’s still a lot of money to be made in cloud computing.

In fact, Oracle (ORCL) just announced a deal to buy RightNow (RNOW) at a 20% premium.  RNOW is a cloud computing company with a rapidly growing footprint.

The deal immediately makes ORCL a force to be reckoned with in the fiercely competitive industry.

And more importantly, it signals the beginning of the next phase of cloud growth.

You see, ORCL is a massive $165 billion tech company.  They don’t bother with emerging tech trends.  There’s just not enough money in the early phases.

They have a history of letting smaller competitors lay the groundwork for emerging tech trends.  Then they hop on the bandwagon with a big acquisition.

And once ORCL sets its sights on a market they want to compete in… watch out, we’re going to see some fireworks.

More than likely, Oracle’s acquisition of RightNow is just their first step. Next, we’ll likely see them go after a few other cloud companies.  In fact, Oracle could spark a merger and acquisition bonanza in the industry.

So, are cloud computing stocks a buy?

Amazingly, many of the hottest cloud computing stocks have gone on sale.  The entire industry is down about 10% to 20% from the 52-week highs.

Simply put, this looks like a great buying opportunity to me.

Take a look at adding some cloud computing stocks to your portfolio.  It’s a good bet that Oracle’s entrance into the cloud will kick industry growth into high gear.

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Category: Stocks

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets on a daily basis. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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