Amazon, Microsoft Or Google: Which Is The Best Play On Surging Cloud Infrastructure Demand?

Friday, May 22, 2020

By now, the impact of the coronavirus around the world for the last few months is becoming more evident. In terms of the internet, people have had to use it more and more for multiple reasons. These include being able to work; attend school, college and university; as well as keeping millions of people entertained during lockdown and quarantine.

The result of this for cloud service providers is a huge increase in demand, particularly around public cloud infrastructure. This lets organisations of all different types to use computing infrastructure, without having to set up, maintain and manage physical servers themselves. There are some big names that lead the cloud computing markets, including Amazon, Alphabet, Microsoft, and Oracle.

In some form or another, most internet users will be using the services of one of these companies when on an app. Because of this, there has been a recent trend for stocks around these companies to improve. This article will outline how some of these leading providers have performed.

Amazon

As a leading brand in this area, Amazon has done well out of the surge in demand. During the pandemic, its stock has increased to record levels. This has been for a combination of reasons, mainly an increase in demand for two of its main services: eCommerce and cloud computing. Thanks to these, Amazon saw a 28% YTD return, with a $1.2 trillion market cap.

Microsoft

Microsoft has long been a leader in so many computing fields, with cloud computing no exception. The cloud computing section of the organisation is called Azure and in recent years its market share has been increasing - largely taking ground from Amazon. Year on year, the last quarter saw approximately 59% increase in revenue. The area of the business that includes Azure, called the intelligent cloud segment, had $39 billion in sales. This was 31% of Microsoft’s revenue over the 2019 financial year. The recent situation has caused stocks to receive a 16% YTD return, alongside a $1.38 trillion market cap.

Alphabet (Google)

There has been some speculation about the impact the global pandemic will have on one of Google’s main income streams - advertising. Some experts have been suggesting revenue will decrease as marketing plans are put on hold, whereas others in the industry highlight the opportunity. If more people are online, there is a larger audience to market to.

Despite that debate, the cloud services aspect of the business is performing well. The Cloud provider area of Alphabet saw an increase in revenue of approximately 52% over the first quarter, reaching $2,78 billion. This scenario saw a 3% YTD return on stock, with a $940 billion market cap.

Oracle

Oracle is not quite on the scale of the other providers on this list. Nevertheless, there is still a lot to pay attention to. This is particularly the case if you consider the investments the organisation has been putting into its data center operations. By the end of 2020, they plan to have built a further 20 datacenters. Oracle itself has a wealth of experience providing services for enterprise level clients, which bodes well for the prospect of its cloud computing wing moving into the future. Currently Oracle has a -0.5% YTD return on investment, with $165 billion market cap.

The global Coronavirus pandemic has forced people, societies, and economies to vastly change their day to day lives and operations. With help from the internet, the impact has been slightly reduced. A lot of people have been able to work from home, stay connected with friends and family, and keep entertained with social media, video streaming services and web browsing.


While a lot of industries around the world have been impacted negatively by the pandemic, cloud computing is not one of them. Because of the huge increase in demand for internet service outlined above, cloud providers have become even more important than they were before. Companies such as Microsoft, Amazon, Google, and Oracle, have benefitted from the Covid-19 outbreak, areas of their business that were already performing strongly have received a further boost. This has been reflected by the improvement in YTD prices across apart from Oracle. Time will tell how these improvements will pan out into the future, but for now it looks as if the cloud computing sector is an extremely promising one.