The cloud computing sector has been one of the strongest achievers of the year so far, as the coronavirus outbreak and shift to remote work forced companies and organizations around the world to adapt their computing activities to the cloud to be moved.
Not surprisingly, cloud-related ETFs have almost traded their best level ever, with the First Trust Cloud Computing ETF (NASDAQ 🙂 and the Global X Cloud Computing Fund (NASDAQ 🙂 respectively at 32% and 47% are up to date.
Below, we highlight three of the top performing names in the high-flying, cloud-based tech sector. Each will enjoy accelerated profit and sales growth thanks to the robust demand for their innovative products.
Each is also worth considering pending their upcoming quarterly reports, as increased Internet traffic, increasing media consumption and booming e-commerce activities are expected to have improved their respective results.
1. Fastly : August 5 reports after Markets Close
Fastly (NYSE: ) saw its shares outperform the broader market this year, rising 478% in 2020 as investors become increasingly optimistic about the online content delivery network specialist.
The San Francisco, California-based cloud computing company, which became public in May 2019, helps other companies accelerate their websites, apps, video and streaming offers on mobile devices. Currently, it's quickly tapping big names like the video sharing app TikTok, ecommerce giant Shopify (NYSE :), music streaming service Spotify (NYSE :), and messaging app Slack (NYSE 🙂 as clients.
On Tuesday, the stock reached a record high of $ 116.28, before ending at $ 116.18, earning the fast-growing technology company a market capitalization of approximately $ 11.9 billion.
Fastly, which reported in early May, reports earnings after Wednesday's closing bubble.
Consensus calls for a loss of $ 0.01 per share for the second quarter, compared to a loss of $ 0.16 per share for the prior year period. Revenue is expected to rise 54% from the same period a year earlier to $ 71.4 million, reflecting strong demand for cloud services during the coronavirus lock.
In addition to the top and bottom line figures, investors will focus on Fastly's update regarding the outlook for the rest of the year and beyond. The company increased its full-year sales expectations to a range of between $ 280 million and $ 290 million in the last quarter, compared to a previous sales forecast between $ 255 million and $ 265 million, citing continued customer expansion on its platform.
2. Cloudflare: Reports Aug 6 after Markets Close
Cloudflare (NYSE 🙂 Shares have more than doubled this year, up 148% as it capitalizes on strong demand for its cloud-based network and cybersecurity services as a result of the spike in Internet traffic amid the ongoing COVID-19 pandemic.
The San Francisco, California-based company, which provides web security and infrastructure services, protects and facilitates operations for more than 27 million websites and applications worldwide. According to recent Morgan Stanley research, about 10% of Fortune are 1,000 paying customers and 10% of the top million websites use at least one Cloudflare solution.
The stock reached a record high of $ 42.82 yesterday before closing at $ 42.31, generating a market capitalization of approximately $ 12.9 billion.
Cloudflare, whose earnings and Q1 results are expected to report Q2 results on Thursday, August 6 after closing. According to consensus estimates, the network security firm should report a loss of $ 0.06 per share, while revenues are expected to total $ 94.1 million, up from $ 91.2 million in the previous quarter.
Aside from EPS and earnings figures, investors will be keen to hear more details about the recently launched serverless cloud computing platform Workers Unbound, which aims to be cheaper and faster than competitors' platforms, including Amazon's (NASDAQ: ) Web Services, Microsoft (NASDAQ 🙂 Azure and Google (NASDAQ 🙂 Cloud.
3. Fortinet: reports August 6 after Markets Close
Cyber ??security specialist Fortinet (NASDAQ: ) has seen its stocks soar during the Corona virus crisis, rallying a dazzling 97% since the market fell in late March. The cloud-based formation security specialist has taken advantage of the increasing demand for its services as the pandemic accelerated the digitization trends of companies.
The stock closed at $ 138.83 last night, in view of a record high of $ 151.84 reached on July 9. At the current level, the Sunnyvale, California-based company has a valuation of approximately $ 22.4 billion.
Fortinet, whose revenues and earnings are easily in the first quarter, is expected to report its second quarter results on Thursday, August 6 after its closing.
According to consensus estimates, earnings of $ 0.65 per share are required, which would indicate an annualized growth in earnings per share of 12%. Revenue is expected to grow about 15% over the same period a year earlier to $ 599 million as the shift many companies made to allow employees to work from home created a growing demand for its security solutions.
Perhaps of greater importance, investors will monitor growth rates in Fortinet's service segment, including offers such as FortiGuard security subscriptions and FortiCare technical support. Wall Street analysts forecast sales of $ 395 million for the quarter, indicating a 19% year-over-year increase.
