Check out this stock. DigitalOcean is a compelling price-trend stock that continues to generate a lot of interest from investors. Let's dive into what the company does and why it could be a great trade during earnings season. Each Monday, I share a watchlist with my Surge Point Trader audience. Given that we focus on strong price-trends and breakout small cap stocks, I wanted to give you a glimpse of a stock that I'm watching this week.
| | | | | | This Cloud Stock's Price Might Jump into the Stratosphere |
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|  Dear Reader,
Each Monday, I share a watchlist with my Surge Point Trader audience.
Given that we focus on strong price-trends and breakout small cap stocks, I wanted to give you a glimpse of a stock that I'm watching this week.
Everyone will be talking about Amazon.com and Microsoft this week.
Both tech giants will report earnings in the coming days, and there will be a frenzy around these names. One of the most important numbers you can expect to see in those earnings reports is the growth of their cloud-computing services.
Amazon's AWS and Microsoft's Azure dominate the industry.
In the first quarter of 2021, Amazon Web Services reported revenue of $13.5 billion. That crushed analysts' expectations and signaled a year-over-year growth of 32% for the quarter. The tech giant has seen robust demand in the wake of COVID-19 as more companies move toward cloud data management.
What's so incredible about that report was the news that AWS represented 12% of Amazon's total revenue but also 47% of its entire operating income.
Meanwhile, Microsoft's Azure saw a 50% increase in revenue growth over the previous quarter. That number is slightly lower than the 59% increase that the company saw in Q1 2020. Investors should know that Microsoft doesn't report all of its information around Azure. Instead, it includes the group's numbers in a segment known as its "Intelligent Cloud" business. That group saw a 23% increase in revenue during the first quarter. It generated $15.1 billion.
In the world of cloud, it really is a two-horse game. AWS represented 32% of the global cloud business in Q1 2021. And Microsoft Azure represented 19%.
While Google Cloud holds 7%, there is still 42% of the global cloud market share available.
And I want you to pay attention to the following company.
Meet Digital Ocean (DOCN)
Digital Ocean is a public central cloud firm that works with small- to medium-sized businesses. They are not counting on the growth of large enterprise data like their competitors in Microsoft and Amazon.
Instead, they are focused on a different class of companies that need their services to protect data, facilitate business, and grow at breakneck paces.
The company is an incredible growth story. Following its IPO in March, it had a bit of a breakdown. But investors slowly recognized the real potential here. It had 585.000 customers at the onset of Q1 2021. And it has customers in 185 nations.
There is plenty of information out there on why this is a high-growth stock trading at a discount to its peers. I am not heavily focused on this. What I care about is one single trend. The price of the stock.
What we see here is a stock that looks to be on the verge of a breakout.
Talk more soon,
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| | | Garrett Baldwin
Chief Analyst, American Markets
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| | | | | Remember these letters: VLEO
Because this is what the smart money is chasing right now. And for good reason, too:
It's a key part of an industry Bank of America estimates could soon be worth $2.7 TRILLION.
By my estimates, you'll want to get positioned in VLEO well before October 1st, 2021.
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