Fears of a recessions are growing as inflation remains persistent and central banks are raising rates. TD Securities believes that there is a 50% chance of a recession in the U.S. within the next 18 months.1
In recessionary times, business spending typically declines. But according to a recent report by Equinix Inc, even with economic uncertainty hovering, 72% of the IT decision-makers said that their companies are planning to grow their digital technologies. In addition, more than 70% of decision-makers said that they are moving more functions to the cloud.1
Since cloud computing spending isn’t showing signs of slowing down, cloud services and solutions providers are taking steps to broaden the use of the cloud. In July, Microsoft Corp. announced the general availability of Oracle Database Service for Microsoft Azure. This offering will allow Azure’s customers to provide, access, and monitor Oracle Database services in Oracle Cloud Infrastructure (OCI) with a familiar experience.
Users will also be able to migrate or build new applications on Microsoft’s Azure and connect it to Oracle Database services that run on OCI.2
Furthermore, Unity Software Inc., a video game software development company, announced that it’s partnering with Microsoft’s cloud solutions provider Azure to create real-time 3D experiences. Developers will be able to use Azure and Unity together, which gives users access to various new tools and makes it easier for Unity games to be on PC and Xbox.3
Amazon Web Services (AWS), a subsidiary of Amazon.com Inc., recently announced a premium paid subscription service for individuals and teams looking to improve their cloud computing skills.
The individual subscription is priced at $29.00 per month or $299.00 for the year. It offers three practice exams for the AWS Certification program. Subscribers also get builder labs and practical guided exercises.4
AWS has been one of the top profit engines for Amazon.com. This new premium subscription could make the cloud computing solutions provider even more profitable.
Snowflake’s Solid Financial Performance
Snowflake Inc. is a cloud computing solutions provider. The company reported strong financial performance for its most recent quarter with improved revenue and solid profits.
Most notably, remaining performance obligations jumped 78% to $2.7 billion and net revenue retention was up 171%. Snowflake also said that its total customer count stands at 6,808 and 246 of these customers have trailing revenue of more than $1 million.
Analysts believe that the company’s strong financials are a testament of the strategic business model in place at the company and they expect Snowflake Inc.’s stock to trade up significantly.5
DocuSign’s Improved Outlook
DocuSign Inc., an electronic signature software provider, recently reported its financial results that were above analysts estimates. The company also increased its outlook for billings this year.
According to analysts, the guidance looks conservative but it doesn’t indicate a slowdown in growth for the reminder of the year. In fact, guidance was better than expected, and investors should take a “wait-and-see” approach until a new CEO for the company is announced. Former CEO Dan Springer stepped down in July.6
Investing in the Cloud with Evolve ETFs
Over the past decade, cloud has fundamentally changed the way businesses and individuals access data. If you’re interested in investing in cloud, consider a cloud computing ETF.
Evolve Cloud Computing Index Fund (DATA ETF), Canada’s first cloud computing ETF. DATA ETF invests primarily in equity securities of companies located domestically or internationally that have business operations in the field of cloud computing. To learn more about DATA ETF, please click here: https://evolveetfs.com/data/.
DATA ETF PORTFOLIO STRATEGY AND ACTIVITY
For the month of August, Snowflake Inc. made the largest contribution to the Fund, followed by Zoominfo Technologies Inc, and Bill.com Holdings Inc. The largest detractors to performance for the month were Amazon.com Inc., followed by SAP SE, and Salesforce Inc. On last rebalance, these securities were added to the portfolio: Concentrix Corp. and DocuSign Inc. By weight, the Fund’s largest geographic exposure was to United States, followed by Germany and Japan.
Looking for a more diversified investment solution? The award-winning Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5g, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/ or click here.
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- Gillin, P., “What recession? Tech spending stays robust as digital transformation plans forge ahead,” Silicon Angle, July 27, 2022; https://siliconangle.com/2022/07/27/recession-tech-spending-stays-robust-digital-transformation-plans-forge-ahead.
- “Oracle and Microsoft announce availability of Oracle Database Service for Microsoft Azure,” Microsoft Corp, July 20, 2022; https://news.microsoft.com/2022/07/20/oracle-and-microsoft-announce-availability-of-oracle-database-service-for-microsoft-azure.
- “Unity and Microsoft announced Azure cloud partnership,” Venture Beat, August 8, 2022; https://venturebeat.com/games/unity-and-microsoft-announced-azure-cloud-partnership.
- Sawers, P., “Amazon launches AWS Skill Builder training subscriptions starting at $29 per month,” Techcrunch, August 2, 2022; https://techcrunch.com/2022/08/02/amazon-launches-aws-skill-builder-subscriptions-starting-at-29-per-month/?guccounter=1.
- Savitz, E.J., “Snowflake Stock Soars. Sales Growth Crushed Estimates,” Barron’s, August 25, 2022; https://www.barrons.com/articles/snowflake-earnings-stock-price-51661375311.
- Woelfel, J., “DocuSign Stock Surges on Earnings Beat, Boost to Billings Forecast,” Barron’s, September 9, 2022; https://www.barrons.com/articles/docusign-stock-price-earnings-51662710712?mod=md_stockoverview_news.