Invest in This New-World, Pure-Play Cloud-Computing ETF
- Many companies are shifting to cloud-based computing systems, with the average organization’s budget climbing 38% from $1.6 million in 2016 to $2.2 million in 2018.
- One major provider of exchange-traded funds (ETFs) projects the cloud computing industry to be worth more than $300 billion by 2022 — a 60% leap from 2018.
The roar of the engines rumbled through the stadium. I was so close, I could almost feel the breeze as the test cars zoomed past me.
As a car enthusiast, I will never forget touring the iconic Daytona International Speedway just days before the Daytona 500.
It was exhilarating.
And soon, I’ll be able to relive that experience from the comfort of my own living room.
You see, the National Association for Stock Car Auto Racing (NASCAR) recently announced a cloud computing partnership with Amazon Web Services Inc. (AWS) — a leader in cloud platform technology.
What this means is NASCAR will be able to migrate over 70 years of historical video footage to the AWS cloud.
This digital video footage will be featured on NASCAR.com and will help fans like me relive some of the greatest auto racing feats in NASCAR’s history.
It will also propel NASCAR forward and help the organization improve how fans experience the sport.
And that’s great news for savvy investors.
Get in Early on This Industry Disruption
Here at Bold Profits, we are hyperfocused on industry disruptions.
We keep an eye on the escalating trends that will eventually transform existing industries as we know them.
Then we guide our readers to be early adopters and investors in these soon-to-be mega disruptors.
That’s why I’m watching this fresh trend in the cloud computing industry. It’s shaking up operations of many companies, from automotive to retail.
Cloud computing is when data is stored over the internet versus physical hard drives. It’s transformed businesses like Netflix, Instagram and Dropbox.
Cloud computing services include these four major categories:
- “Infrastructure as a service” (IaaS) offers virtual computing infrastructure via the internet.
- “Software as a service” (SaaS) allows cloud-based software to be available via the internet through a web browser or app, on a monthly or annual subscription basis.
- “Platform as a service” (PaaS) supports the development and deployment of web applications via the internet.
- Data center real estate investment trusts offer the storage capacity and security needed to keep information sent to the cloud.
The concept of cloud computing is not new. It’s been around since 2000.
Yet, despite its existence, according to the latest cloud computing study by International Data Group (IDG), more than 50% of U.S. organizations’ IT environment is still not cloud-based.
But times are changing — and changing quickly.
The same organizations surveyed by IDG also stated they planned to ramp up cloud adoption and cut their dependence on non-cloud environments by nearly half in the coming months.
IDG also found that the average organization’s cloud budget climbed nearly 38% from $1.6 million in 2016 to $2.2 million in 2018.
And this is just the beginning.
Per Global X, a major provider of exchange-traded funds (ETFs), the cloud computing industry is projected to be worth more than $300 billion by 2022. That’s a 60% leap off of its $188 billion value in 2018.
Companies across various industries are making big strides to shift to cloud-based computing.
One of the biggest is the automotive industry.
The New Automotive Cloud
NASCAR’s Executive Vice President of Innovation and Development, Craig Neeb, put it this way:
“Speed and efficiency are key in racing and business, which is why we chose AWS — the cloud with unmatched performance, the most comprehensive set of services, and the fastest pace of innovation — to accelerate our migration to the cloud.”
NASCAR is not alone.
Volkswagen announced earlier this year that it has formed a strategic partnership with Microsoft Azure, a large cloud provider, to help develop the Volkswagen automotive cloud.
Through this partnership, Volkswagen plans to offer connected vehicle services around the world.
Satya Nadella, CEO of Microsoft, said it best: “Digital technology is rapidly changing every aspect of the auto industry — from the manufacturing process to the car itself. Our partnership will enable Volkswagen to deliver new Azure-based connected vehicle services that accelerate the company’s transformation into a software-driven mobility provider and define the future of mobility for people everywhere.”
NASCAR and Volkswagen are just the tip of the iceberg.
Other automakers, such as Tesla, Toyota and BMW, are also fully embracing automotive clouds and autonomous vehicle cloud computing.
Invest in the Biggest New-World, Pure-Play ETF
A brand-new, themed ETF that launched just two months ago is one of the most promising ways to invest in the cloud computing mega trend.
This new ETF is called the Global X Cloud Computing ETF (Nasdaq: CLOU). It has already attracted more than $300 million in inflows in its short history.
Bloomberg data show CLOU holds more pure-play cloud computing companies than any other competing cloud-based ETF.
“Pure-play” means that CLOU has a narrower investment objective that’s focused on cloud computing enterprises such as AWS, SalesForce.com and Box, versus technology behemoths Cisco and Oracle.
This helps CLOU hold companies that are more laser-focused on new-world cloud computing companies and their technologies.
In all, there’s a huge demand ramping up in the cloud computing space as more companies move from non-cloud environments to nearly 100% cloud-based environments.
CLOU is set up to be a great way to play this trend.
Until next time,
Director of Investment Research, Banyan Hill Publishing