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5 Cloud Stocks to Buy as Microsoft Soars

On Friday, Microsoft Corporation MSFT bettered its last record close achieved in Dec 1999, back during the dot-com era. Encouraging first quarter earnings results lifted the software major’s shares higher. Rising demand for cloud software and services were the primary reason for this spectacular performance.

These results once again underline the growing importance of the cloud. Stocks gaining from the cloud computing phenomena make for attractive options at this point. Adding them to your portfolios would make for a prudent choice.

Azure Boosts Microsoft’s Results

Microsoft’s first-quarter fiscal 2017 earnings of 76 cents per share surpassed the Zacks Consensus Estimate of 68 cents. Revenues of $22.33 billion increased 3.1% from the year-ago quarter and exceeded the Zacks Consensus Estimate of $21.54 billion.

The high point of these results was revenue from Azure, which soared 121% year over year, with Azure compute usage doubling. Microsoft is benefitting from its hybrid and hyperscale cloud, which spans multiple jurisdictions. This makes it ideal for multinational companies and banks that have operations all over the world and are required to be in compliance with laws of the countries in which they operate.

This is the reason Microsoft cites which has drawn 80% of the world’s largest banks to Azure. Moreover, the company’s expanding cloud services have also helped it to capture big customers like Boeing BA, Rolls-Royce, Schneider Electric and Facebook FB. (Read: Microsoft (MSFT) Beats Q1 Earnings on Strong Cloud Growth)

Cloud’s Prospects Remain Strong

According to a study by non-profit association CompTIA released last month, most companies are continuing to make major investments related to the cloud. More than 90% of the companies surveyed utilized some form of cloud computing. However, businesses are also becoming more selective in the kind of cloud technology which are they choosing adopt.

Meanwhile, the primary motivation behind adopting cloud computing technology is the associated cost reduction. The survey revealed that 44% of medium businesses, 47% of larger...