What happened Shares of data visualization expert Splunk (NASDAQ: SPLK) gained 32.4% in May 2020, according to data from S&P Global Market Intelligence. The stock reached fresh all-time highs when the company reported solid first-quarter results on May 21. So what Splunk's shares were already on the rise when the earnings report came along, helped by a new cloud-computing partnership with Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google. In the first quarter, Splunk's sales rose 2% year over year to $434 million. The adjusted bottom line swung from earnings of $0.02 per share to a net loss of $0.56 per share. Analysts had been expecting a $0.57 loss per share on revenues in the neighborhood of $443 million. That mixed performance might not sound like a vat of rocket fuel, especially since revenue guidance for the second quarter also fell below analyst projections, but Splunk's shares soared 13% higher the next day. Image source: Getty Images. Now what Splunk's customers are trading in their old-school software licenses for cloud-service contracts by the busload. Cloud-service sales rose 81% year over year in the first quarter while license revenues fell by 27%. This business mix hurts the company's top line in the short run but promises to replace those lost license sales with subscription-style renewable revenues for years to come. The software sector as a whole has embraced this business model in recent years, and Splunk is a little late to the party. But you know the old adage -- better late than never. 10 stocks we like better than SplunkWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Splunk wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of April 16, 2020 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund owns shares of Alphabet (A shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Splunk. The Motley Fool has a disclosure policy.Source