For immediate release
Chicago, IL – May 25, 2022 – Zacks.com announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: 8×8, Inc. EGHT, Duck Creek Technologies, Inc. DCT, Paycom Software, Inc. PAYC, and Veeva Systems Inc. VEEV.
Here are the highlights from Tuesday’s analyst blog:
4 stocks to buy when cloud infrastructure spending increases
The cloud infrastructure market has grown rapidly over the past few years, which has further accelerated during the pandemic. As the pandemic spread rapidly, millions of people were working and learning from home. This has led to the rapid growth of cloud business as businesses and organizations, including the healthcare industry, realize the future of digitization and begin to prioritize digitization strategies.
Given this situation, it would be ideal to invest in stocks like 8×8, Inc., Duck Creek Technologies, Inc., Paycom Software, Inc. and Veeva Systems Inc.who should benefit from it in the short term.
Rise in cloud infrastructure spending
According to a new report from Canalys, spending on cloud infrastructure services grew 34% year-over-year in the first quarter of 2022 to $55.9 billion. That’s about $2 billion more than the prior quarter and $14 billion more year-over-year.
Cloud infrastructure services include infrastructure as a service (IaaS), software as a service (SaaS), platform as a service (PaaS), and hosted private cloud services.
As businesses move more towards digitalization, keeping in mind the ease of working from remote areas, the demand for storage has increased at a rapid rate. This has caused companies to focus on building business resilience.
Moreover, people have finally understood the importance of digitization. Today, more and more enterprises are prioritizing cloud business transformation as they grapple with global supply chain challenges, cybersecurity concerns, and geopolitical uncertainty.
“Organizations of all sizes and in all vertical markets are turning to the cloud to provide flexibility and resilience in the face of these challenges,” the report says. Due to this growing demand, the report mentions that major cloud providers have seen a significant increase in order books.
Additionally, according to the report, the top three cloud service providers enjoyed increased adoption and scale, growing 42% year-over-year and accounting for 62% of total customer spend. in the world.
The cloud business is poised to grow
The concepts of working, learning and buying have changed after the outbreak of COVID-19 in 2020. As a result, businesses have started to adopt SaaS. Moreover, most companies have since realized the importance of storage and have started transferring data and information to technical and digital platforms in order to stay afloat in this competitive environment.
As a result, the cloud business benefited. Additionally, cloud companies are increasing their infrastructure spending to get things done. Higher spending helps businesses generate more revenue, with big players leading the way.
According to a new report from Gartner, global spending on public cloud services is expected to grow 20.4% to $495 billion in 2022 as businesses accelerate their digital transformation in the post-COVID era.
Total spending on public cloud services is already $84 billion higher this year than the amount spent in 2020 and is expected to jump 21.3% to nearly $600 billion in 2023.
According to Gartner, infrastructure software as a service is expected to see the strongest end-user spending growth of 30.6% in 2022 in overall cloud spending. It will be followed by Desktop as a Service (26.6%) and Platform as a Service (26.1%).
Given this situation, it would be ideal to invest in these four stocks. Each of the stocks carries a Zacks rank of No. 1 (Strong Buy) or 2 (Buy). You can see the full list of today’s Zacks #1 Rank stocks here.
8×8, Inc. is the world’s leading communications cloud provider that combines unified communications, team collaboration interoperability, contact center and real-time analytics in a single open platform. EGHT reduces complexity and costs, improves individual and team productivity and performance, and improves the overall customer experience. 8×8 ensures high reliability and business continuity by providing its cloud-based communications through the use of secure and fully redundant data centers.
The expected earnings growth rate of 8×8 for the current year is 75%. The Zacks consensus estimate for current-year earnings has improved 55.6% over the past 60 days. EGHT wears a Zacks rank #2.
Duck Creek Technologies, Inc. is a provider of enterprise software in SaaS mode for the property and casualty insurance sector. DCT provides the Duck Creek Policy, which enables insurers to create and market new insurance products as well as manage various areas of policy administration.
Duck Creek Technologies’ expected earnings growth rate for the current year is 25%. The Zacks consensus estimate for current-year earnings has improved 11.1% over the past 60 days. DCT has a #2 Zacks rank.
Paycom Software, Inc. is a provider of cloud-based human capital management software as a service solution for integrated software for both employee records and talent management processes. Founded in 1998, PAYC offers analytics that manage the complete employment lifecycle, from recruitment to retirement.
Paycom Software’s expected profit growth rate for the current year is 23.4%. The Zacks consensus estimate for current-year earnings has improved 1.3% over the past 60 days. PAYC has a Zacks rank of #2.
Veeva Systems Inc. offers cloud-based software applications and data solutions for the life science industry. VEEV’s product portfolio includes Veeva CRM (customer relationship management), Veeva Vault (content and information management), Veeva Network (customer and product data management), and Veeva Data Services (Veeva OpenData and Veeva KOL).
Veeva Systems’ expected earnings growth rate for the current year is 7.8%. The Zacks consensus estimate for current-year earnings has improved 0.2% over the past 60 days. VEEV holds a #2 Zacks rank.
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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. To visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.
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It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could jump in at any moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.