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What is Cloud Computing?

Cloud computing is the technique of processing, storing, and managing data on a network of remote computers hosted on the internet by cloud service providers rather than on a personal computer or local server using only as much compute power and storage as needed to meet demand. This theoretically allows for cheaper and faster computing because it eliminates the need to purchase, install, and maintain servers.

Cost Saving Implications of Cloud Computing Adoption

McKinsey estimates that cloud adoption could generate $3 trillion in global value by 2030 derived from:

• reducing operational costs,
• reducing digital risk,
• generating new revenue from innovation-driven growth and accelerated product development and hyper-scalability and from
• emerging technologies, including new cloud-based business models and integration with technologies like 5G, blockchain, and quantum computing. (Source)

What is SaaS?

SaaS, also known as cloud application services, makes software available to users over the internet, usually for a monthly subscription fee. They are typically ready-to-use and are run from a users’ web browser which allow businesses to skip any additional downloads or application installations. SaaS accounts for 38.5% of cloud computing revenue. (Source)

For more insightful information you are encouraged to read Cloud Computing 101.
 

Key Catalysts Behind the Decline MTD

• Gartner Inc. slashed its full-year sales guidance on August 5, citing weaker-than-expected demand for enterprise cloud services and this triggered a broader reassessment of growth expectations across cloud providers and infrastructure firms.
• In addition, many cloud stocks were trading at elevated price-to-sales and price-to-earnings multiples, making them vulnerable to any signs of deceleration, causing investors to rotate out of high-growth tech into more defensive sectors amid rising macro uncertainty.

Company-Specific Catalysts & Performances MTD

In addition to the overall market catalysts, as mentioned above, the 8 largest market cap constituents in our Our Pure-Play Cloud SaaS Computing Stocks Portfolio are highlighted below with:

• the focus of each company in the portfolio,
• how each of the constituents (stocks) in the portfolio performed week-ending August 8th, in descending order,
• the catalyst(s) contributing to the change in constituent stock prices, and
• how the stocks performed in July, and YTD. 

1. Workday (WDAY): DOWN 3.2% w/e August 8th; DOWN 3.4% in July; DOWN 13.9% YTD
   • Focus: provides enterprise cloud applications to help its customers manage their business and operations
   • Performance Catalyst(s):
     1. While Workday’s Q2 earnings were solid, its Q3 revenue EPS guidance came in below analyst expectations signaling cautious spending trends among large customers which disappointed investors who were hoping for acceleration in enterprise cloud demand. 
     2. In addition, Workday was trading at a premium valuation, with elevated price-to-sales and price-to-earnings multiples so,.in a week where cloud stocks broadly declined, high-valuation names like Workday were hit hard
   • Analysts' Consensus Rating:
     • BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: +5.8%; High: +55.5%; Average: 35.6% Source
2. HubSpot (HUBS): DOWN 4.1% w/e August 8th; DOWN 5.6% in July; DOWN 28.5% YTD
   •  Focus: provides a cloud-based customer relationship management (CRM) platform for businesses
   • Performance Catalyst(s):
     1. Truist Financial downgraded HubSpot’s price target by 6% triggering a wave of selling despite maintaining a “buy” rating, signaling concern over near-term growth and execution risks.
     2. the Company's strategic pivot toward AI, while promising long-term, introduced short-term uncertainty, and
     3. co-founder Brian Halligan sold 8,500 shares, which may have added to bearish sentiment
   • Analysts' Consensus Rating:
     • Strong BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: +33.4%; High: +11.2%; Average: +61.8% Source
3.  Datadog (DDOG):DOWN 6.5% w/e August 8th; UP 2.2% in July; DOWN 8.4% YTD
   • Focus: operates an observability and security platform for cloud applications
   • Performance Catalyst(s):
     1. reported Q2 earnings on August 7 were less than expected especially given the company’s positioning in AI-driven observability and cloud infrastructure,
     2. EPS guidance came in light compared to expectations,
     3. despite beating Q1 expectations earlier in the year, Datadog’s stock had shown a pattern of post-earnings underperformance, and this quarter was no exception,
     4. the Company's P/E ratio of over 200 also made it highly sensitive to any signs of slowing growth and even the minor guidance miss triggered a sharp selloff as investors reassessed risk in richly valued tech names.
   • Analysts' Consensus Rating:
     • BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: -19.8%; High: +52.8%; Average: +15.4% Source
4. Salesforce (CRM): DOWN 6.9% w/e August 8th; DOWN 5.5% in July; DOWN 28.1% YTD
   • Focus: provides customer relationship management (CRM) technology that connects companies and customers together worldwide
   • Performance Catalyst(s):
     1. Q4 fiscal 2025 revenue missed analyst expectations raising concerns about slowing growth causing Investors to rotate out of CRM,
     2. the company’s new AI-powered Agentforce platform saw slower-than-expected adoption, which dampened investor enthusiasm for Salesforce’s AI strategy given the broader market excitement around AI-driven enterprise solutions,
     3. the Company announced that Robin Washington would take on a combined role as President, COO, and CFO, a move that surprised analysts and raised questions about strategic direction and,
     4. Zacks Rank for salesforce dropped to #4 (Sell), reflecting negative sentiment from analysts.
   • Analysts' Consensus Rating:
     • BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: -6.5%; High: +78.8%; Average: +44.8% Source
5. ServiceNow (NOW): DOWN 7.5% w/e August 8th; DOWN 7.8% in July; DOWN 17.7% YTD
   • Focus: provides end to-end intelligent workflow automation platform solutions for digital businesses
   • Performance Catalyst(s):
     1. Despite reaffirmed “Market Outperform” ratings from firms like JMP Securities, sentiment turned cautious as investors question how much upside remains,
     2. ServiceNow’s heavy investment in AI-driven workflow automation is seen as promising but possibly overvalued in the short term,
   • Analysts' Consensus Rating:
     • Strong BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: -17.0%; High: +49.0%; Average: +26.3% Source
6. MongoDB (MDB): DOWN 12.1% w/e August 8th; UP 13.3% in July; DOWN 10.4% YTD
   • Focus: provides general-purpose database platforms worldwide and offers consulting and training services
   • Performance Catalyst(s):
     1. the Company's full-year guidance in its Q2 financial report disappointed Wall Street falling below bullish investor expectations and
     2. While the average rating remains “Moderate Buy,” Loop Capital downgraded the stock from “Buy” to “Hold” and slashed its price target by 46%.signaling caution amid slowing momentum.
   • Analysts' Consensus Rating:
     • BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: -9.2%; High: +105.6%; Average: +37.5% Source
7. Atlassian (TEAM): DOWN 12.4% w/e August 8th; DOWN 5.2% in July; DOWN 30.9% YTD
   • Focus: designs, develops, licenses, and maintains various software products
   • Performance Catalyst(s):
     1. Atlassian's FY26 guidance as revealed in its Q4 financial report came in below consensus, triggering concern about slowing momentum,
     2. Mizuho lowered its price target by 11% citing short-term valuation pressure.
   • Analysts' Consensus Rating:
     • BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: +27.9%; High: +120.2%; Average: +62.9% Source
8. Snowflake (SNOW): DOWN 14.2% w/e August 8th; UP 0.4% in July; UP 24.2% YTD
   • Focus: provides a cloud-based data platform that enables customers to consolidate data into a single source, build data applications, and share data and data products..
   • Performance Catalyst(s):
     1. despite no major earnings release last week, the decline reflected investor skepticism about Snowflake’s ability to sustain high growth amid tightening enterprise IT budgets and
     2. its forward P/E ratio above 70 has investors beginning to reassess risk and rotating away from SNOW.
   • Analysts' Consensus Rating:
     • ​​​​​​​BUY
   • Analysts' 1-Year Price Targets As % Change From Current Stock Price:
     • Low: -16.9%; High: +38.2%; Average: +15.4% Source

Summary ​​​​​​​

The portfolio was DOWN 7.7% w/e August 8th; was DOWN 3.8%% in July, and is DOWN 18.9% YTD.
 

​​​​​​​NEW! Chart of the Portfolio's Performance

Create A Chart Of the Performance Of the Above Portfolio (Such A Feature Is Not Available Anywhere Else) Here's How

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