New Cloud Computing (SaaS) Portfolio Down Slightly Last Week

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Introduction

The rapid adoption of artificial intelligence (AI) is ushering potential data center industry growth and sales revenue as it transitions to serve growing AI demand.

According to an estimate cited by Forbes,

  • “The global artificial intelligence market…. (will) expand at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030”.
  • The cloud computing SaaS market is expected to grow by a CAGR of 11.7% between now and 2030.
  • 98% of companies globally rely on the cloud for at least one part of their business applications.
  • The average rental rate of data centers rose 14.5% in 2022 and 18.6% last year with a continued major increase in 2024 expected.

All the above growth will greatly benefit the data center industry.


The 3 Types of Cloud Computing Service Models Explained

  1. IaaS (Infrastructure as a Service)
    • IaaS, also known as cloud infrastructure services, provides end users with cloud-based alternatives to on-premise, physical infrastructure, allowing businesses to purchase resources on-demand instead of the more costly venture of having to buy and manage hardware. IaaS accounts for 32.5% of cloud computing revenue.
  2. PaaS (Platform as a Service)
    • PaaS, also known as cloud platform services, provides developers with a framework, software and tools needed to build apps and software — all accessible through the internet. PaaS accounts for 29.0% of cloud computing revenue.
  3. SaaS (Software as a Service)
    • SaaS, also known as cloud application services, is the most commonly used service within the cloud market. SaaS platforms make software available to users over the internet, usually for a monthly subscription fee. They are typically ready-to-use and run from a users’ web browser, which allows businesses to skip any additional downloads or application installations. In a nutshell, SaaS offers ready-to-use, out-of-the-box solutions that meet a particular business need (such as a website or email). Most modern SaaS platforms are built on IaaS or PaaS platforms. SaaS accounts for 38.5% of cloud computing revenue. (Source)

70 of the 244 companies in the SaaS sector (see here) generate >65% of their revenue from recurring payments for cloud-based software (see here) of which 35 have market capitalizations of at least $10B with 10 of them having market capitalizations of $50B or more which accounts for 45% of the SaaS sector's total revenue.


The munKNEE Cloud Computing (SaaS) Portfolio

The Portfolio (see below) has been totally revamped and now consists of the 10 companies with minimum market capitalizations of $50B  They are listed below, in descending order, as to :

  • their stock performances last week, YTD and over the past 5 months (since the sector took off at the end of October of last year),
  • their company descriptions,
  • their market capitalizations,
  • their current stock price relative to their forecast earnings in 1-year's time (i.e., PEG ratio) where 2.0 or more.0 means the stock is currently over-valued, 
  • their sales revenue in 2023,
  • their YoY revenue growth and
  • their latest quarter growth.
  1. ServiceNow (NOW): UP 2.8% last week; UP 10.9% YTD; UP 34.7% since the end of October, 2023
    • Company Description: operates a platform enriched with artificial intelligence and machine learning capabilities.
    • Market Capitalization: $161B
    • PEG Ratio: 1.9
    • 2023 Sales Revenue: $9.0B
    • YoY Revenue Growth: 23.8%
    • Latest Quarter Growth: 25.6%
  2. Atlassian (TEAM): UP 0.8% last week; DOWN 17.3% YTD; UP 8.8% since the end of October, 2023
    • Company Description: dedicated to designing, developing, licensing, and maintaining cutting-edge solutions while providing software hosting services. 
    • Market Capitalization: $51B
    • PEG Ratio: 1.3
    • 2023 Sales Revenue: $3.9B
    • YoY Revenue Growth: 22.4%
    • Latest Quarter Growth: 21.5%
  3. Salesforce (CRM): UP 0.2% last week; UP 14.7% YTD; UP 50.3% since the end of October, 2023
    • Company Description: a leading provider of customer relationship management (CRM) technology, operates through its comprehensive Customer 360 platform, encompassing sales, service, marketing, commerce, collaboration, integration, artificial intelligence, analytics, automation, and more. (Source for this and other company descriptions below) 
    • Market Capitalization: $293B
    • PEG Ratio: 1.5
    • 2023 Sales Revenue: $34.9B
    • YoY Revenue Growth: 12.1%
    • Latest Quarter Growth: 11.3%
  4. CloudStrike (CRWD): DOWN 1.6% last week; UP 23.6% YTD; UP 78.5% since the end of October, 2023
    • Company Description: stands out as a cybersecurity leader, delivering cloud-based protection for endpoints, cloud workloads, identity, and data through a software-as-a-service subscription model. 
    • Market Capitalization: $76B
    • PEG Ratio: 1.8
    • 2023 Sales Revenue: $3.1B
    • YoY Revenue Growth: 39.9%
    • Latest Quarter Growth: 35.3%
  5. Workday (WDAY): DOWN 1.6% last week; DOWN 2.8% YTD; UP 26.7% since the end of October, 2023
    • Company Description: focused on finance and human resources, serving approximately 10,000 organizations with software-as-a-service solutions addressing diverse business challenges. 
    • Market Capitalization: $71B
    • PEG Ratio: 1.6
    • 2023 Sales Revenue: $7.3B
    • YoY Revenue Growth: 17.5%
    • Latest Quarter Growth: 16.7%
  6. Intuit (INTU): DOWN 2.2% last week; UP 1.7% YTD; UP 28.4% since the end of October, 2023
    • Company Description: offers a comprehensive suite of financial management, compliance, and marketing solutions 
    • Market Capitalization: $178B
    • PEG Ratio: 2.3
    • 2023 Sales Revenue: $15.1B
    • YoY Revenue Growth: 10.8%
    • Latest Quarter Growth: 14.7%
  7. Shopify (SHOP): DOWN 2.4% last week; DOWN 6.8% YTD; UP 66.6% since the end of October, 2023
    • Company Description: a Canadian company that offers a comprehensive suite of tools designed to facilitate the initiation, expansion, marketing, and management of retail businesses of various sizes. 
    • Market Capitalization: $97B
    • PEG Ratio: 1.4
    • 2023 Sales Revenue: $7.1B
    • YoY Revenue Growth: 26.1%
    • Latest Quarter Growth: 23.6%
  8. Adobe (ADBE): DOWN 3.9% last week; DOWN 18.7% YTD; DOWN 8.8% since the end of October 2023
    • Company Description: offers a comprehensive suite of products and services catering to professionals, businesses, communicators, and consumers involved in creating, managing, delivering, and optimizing content across various digital media formats. 
    • Market Capitalization: $217B
    • PEG Ratio: 1.6
    • 2023 Sales Revenue: $17.6B
    • YoY Revenue Growth: 10.2%
    • Latest Quarter Growth: 11.6%
  9. Snowflake (SNOW): DOWN 4.7% last week; DOWN 22.7% YTD; UP 6.0% since the end of October, 2023
    • Company Description: provides a cutting-edge platform that not only serves as the backbone but also sparks a revolution in data management empowering users to effortlessly consolidate data. 
    • Market Capitalization: $51B
    • PEG Ratio: 4.8
    • 2023 Sales Revenue: $2.8B
    • YoY Revenue Growth: 40.9%
    • Latest Quarter Growth: 31.8%
  10. Autodesk (ADSK): DOWN 6.0% last week; UP 0.5% YTD; UP 23.8% since the end of October, 2023
    • Company Description: a leading provider of three-dimensional (3D) design, engineering, and entertainment technology solutions, offering a comprehensive range of services across various industries, including architecture, engineering, construction, product design, manufacturing, and media. 
    • Market Capitalization: $52B
    • PEG Ratio: 2.0
    • 2023 Sales Revenue: $5.3B
    • YoY Revenue Growth: 9.1%
    • Latest Quarter Growth: 10.5%


Summary

The (non-tradable) Cloud Computing SaaS Portfolio consisting of the above companies was DOWN 1.3% last week, is now DOWN 0.6% YTD, but is still UP 25.0% since the end of October, 2023 (5 months).


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Disclosure: None

This article has been composed with the exclusive application of the human intelligence (HI) of the author. No artificial intelligence (AI) technology has been deployed. ...

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