SKYY - Understanding Cloud Computing Investment Opportunities
2024-07-06 01:00:00 ET
Summary
- Cloud computing is a key component of modern digital infrastructure and the growing AI supply chain.
- Companies focused on cloud computing fall into two categories: pure plays with most of their revenue linked to the cloud, and large tech companies like Microsoft and Amazon, where cloud business is roughly a third or less of their revenues.
- There are roughly a dozen ETFs with cloud computing revenue exposure in the range of 20% – 45% of assets, but how the assets are invested varies meaningfully from one ETF to another.
- To fully understand what investors own, Syntax calculates cloud computing exposure at the company product line level and precisely defines what types of businesses are included in cloud computing.
Cloud Computing Background
The momentum surrounding AI that was unleashed in 2023 continues to grow, and one thing we have learned is that cloud infrastructure is a critical part of the growth in AI. According to Microsoft ( MSFT ), cloud computing is:
Understanding Cloud Computing Investment Opportunities“The delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.”