Top 2 cloud computing stocks to watch in 2022

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 Top 2 cloud computing stocks to watch in 2022
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Highlights

  • Cloud computing sees rapid growth as demand for artificial intelligence, 5G network, and the Internet of Things rise.
  • Trade Desk, Inc. (NASDAQ: TTD) saw customer retention of over 95% in the third quarter ended Sept 30, 2021.
  • DigitalOcean Holdings, Inc. (NYSE: DOCN) has been featured on Newsweek’s list of most loved workplaces for 2021. 

Cloud computing companies see rapid growth as demand for artificial intelligence, 5G, and the Internet of Things rise. Although companies have been using cloud storage services for some time, its craze grew sharply during the lockdowns in 2020. 

Here we discuss two stocks that saw robust growth this year.

The Trade Desk, Inc. (NASDAQ: TTD) 

The Ventura, California-based The Trade Desk provides a cloud-based platform to ad buyers, who can optimize, create, and manage their data-driven ad campaigns in audio, video, display, in-app, and native and social ad formats. These campaigns can be used on different devices.

The company has posted revenue of US$800 million for the nine months ended Sept 30, 2021, up 55% YoY, compared to US$516 million in the comparable period of the previous year. 

The net income grew to US$129.7 million or US$0.26 per share diluted compared to US$90 million or US$0.19 per share diluted in the same period of 2020.

The company saw strong customer retention of over 95% during the quarter.  

Also Read: Top 8 US vaccine stocks of 2021 

The Trade Desk was founded in 2009 and went public in Sept 2016. It has a market capitalization of US$46.1 billion, a P/E ratio of 168.51, and a forward P/E one year of 283.30. 

The stock price moved between US$114.09 and US$46.71 in the last 52 weeks. It generated a 19.91% return YTD and closed at US$96.05 on Dec 23, 2021. 

Also Read: These 5 US stocks returned between 500% and 5,000% in 2021

Top 2 cloud computing stocks to watch in 2022. 

Also Read: Yearender: Top 5 shipping and logistics stocks of 2021 

DigitalOcean Holdings, Inc. (NYSE: DOCN) 

The New York-based DigitalOcean provides cloud computing tools and on-demand infrastructure for start-ups, small and medium-sized enterprises, and developers.

The platform is used for various projects, including web development, gaming, mobile applications, website hosting, e-commerce, etc.

For the nine months ended Sept 30, 2021, DigitalOcean recorded revenue of US$309 million compared to US$231 million for the same period in 2020. 

The company booked a net loss of US$7.38 million or US$(0.08) per diluted share versus a net loss of US$29.7 million or US$(0.72) per diluted share in the same period of 2020. 

Its average revenue per customer (ARPU) in Q3, 2021, increased by 28% YoY to US$61.97. 

Also Read: Yearender: Top 5 healthcare stocks that grabbed limelight in 2021 

 The company was featured in Newsweek’s list of most loved workplaces for 2021. 

The technology company has a market capitalization of US$8.6 billion. The stock traded in the range of US$133.40 to US$35.35 in the last 52 weeks. It closed at US$81.26 on Dec 23, 2021. DigitalOcean launched its IPO in March 2021. The stock gained over 90% since the IPO.

Also Read: Blackstone Products (BLKS) to go public via SPAC – know details 

 Bottomline

The S&P 500 Information Technology Sector Index rose 32.73% YTD, showing the sector's steady growth. However, investors must exercise due diligence before investing in stocks.   

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