HH Top 20 Cloud Stocks For 2020

The year 2019 is coming to an end and here we do a review of the best performing cloud stocks of 2019 and the most promising for 2020. The criteria for making this list are a strong strategy or performance in Platform-as-a-Service (PaaS), Artificial Intelligence (AI), and robust Developer Ecosystems.

Large Players with Revenue over $10B

1. The top company that leads on these fronts is Salesforce.com. Its PaaS offering and developer ecosystems are leaps and bounds ahead of any other company and it has also been executing well on its AI offering, Einstein. Salesforce expects to end the year with revenues of $16.99-$17 billion. Further analysis is available here and here.

Salesforce’s stock has climbed about 35% from its 52-week low of $120.16 in December last year. It is currently trading at $162, close to its 52-week high of $167.57 that it touched in April. Its market cap is $144 billion.

2. Microsoft has executed well on its PaaS strategy thus far. Early this year, it released a new AI-enabled edge appliance called The Data Box Edge. It acts as a bridge or an abstraction layer between the local data sources and cloud storage allowing organizations to use the appliance for processing, filtering, and analyzing the data before storing it in the cloud. For the fiscal year 2019, revenue was up 14% to $125.8 billion and net income was up 137% to $39.2 billion. Further analysis is available here and here.

Its winning strategy is reflected in its stock performance. Its stock is currently trading at an all-time high of $155.53 with a market cap of $1.2 trillion, up 65% from its 52-week low of $93.96 in December last year.

3. While Amazon is not a pure-play cloud company, we like it for the way it executes both its e-commerce business and the cloud business. It leads the way in AI and has the added advantage of enormous data to execute on.

Its stock has improved 35% from its 52-week low of $1307 in December last year. It touched a 52-week high of $2,035.80 in July this year but is currently trading around $1707 with market cap of $877 million.

Mid-Sized Players with Revenue over $1B

1. On PaaS, Atlassian is the top mid-sized player. We have seen it grow from a bootstrapped startup focused on its fundamentals to a company with over $1B in revenue that is acquiring capital-efficient startups. We love it for its discipline and culture, which we feel were pivotal to its success. Atlassian ended the year with revenues growing 37% to $1.21 billion.

Its stock is trading at $121 with a market cap of $29.6 billion, up 78% from its 52-week low of $75.75 nearly a year ago. It touched a 52-week high of $149.8 in August.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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