Best cloud stocks to invest in 2025

Cloud computing continues to reshape the digital economy, powering everything from enterprise software to artificial intelligence. Investors looking for growth, scalability, and recurring revenue should consider leading companies in the cloud space.

Arista Networks specializes in high-performance cloud networking solutions, delivering scalable switches, routers, and software-defined networking for hyperscale cloud providers and enterprises. Oracle provides comprehensive enterprise software and cloud infrastructure solutions, leveraging its pioneering database management systems and integrated cloud platforms for global businesses. Cloudflare operates a global web infrastructure and security platform, enhancing internet performance and safety through its expansive content delivery network and cybersecurity services.

These companies represent a broad spectrum of cloud providers – from infrastructure and platforms to SaaS leaders and niche specialists. For long-term exposure to digital transformation and cloud-driven innovation, these are among the best cloud stocks to invest in 2025.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in stocks mentioned in this article.

Now, let`s take a closer look at each of the companies:

  • Arista Networks (NYSE:ANET)

    Arista Networks is a leading provider of cloud networking solutions, specializing in high-performance switches, routers, and software-defined networking. Founded in 2004 and headquartered in Santa Clara, California, Arista has revolutionized data center and enterprise networking with its scalable, software-driven approach. The company`s products are widely used by hyperscale cloud providers, financial institutions, and large enterprises requiring ultra-low latency and high reliability.

    With a focus on automation, artificial intelligence, and network security, Arista delivers cutting-edge solutions that enhance connectivity and operational efficiency. Its Extensible Operating System (EOS) is a key differentiator, providing a highly programmable and resilient platform for modern cloud environments. Through continuous innovation and strategic partnerships, Arista Networks remains at the forefront of cloud networking technology.

    Arista Networks financial statements

    Analysts recommendation: 1.45

    Financial Health

    • Return on assets (ROA): 15.23%
    • Return on equity (ROE): 33.64%
    • Return on investment (ROI): 29.83%

    Profitability

    • Gross margin: 64.24%
    • Operating margin: 44.73%
    • Net profit margin: 40.89%

    Growth

    • EPS (past 5 years): 27.37%
    • EPS (current): 2.55
    • EPS estimate (next quarter): 0.72
    • EPS growth (this year): 34.6%
    • EPS growth (next year): 17.37%
    • EPS growth (next 5 years): 20.52%
    • EPS growth (quarter-over-quarter): 34.46%
    • Sales growth (past 5 years): 23.77%
    • Sales growth (quarter-over-quarter): 30.4%

    💡 Why invest in Arista Networks?

    Like a high-performance network backbone that powers modern cloud infrastructure, Arista Networks demonstrates compelling strengths for cloud technology investors:

    • Cloud Networking Leadership: Arista stands as a recognized leader in the cloud networking arena, enjoying strong reputation for high-performance, reliable solutions with significant market share and brand recognition within the industry.
    • Software Defined Approach: Arista`s commitment to SDN simplifies network management, reduces operational costs, and allows for greater flexibility compared to traditional networking solutions, positioning for future success.
    • Open Networking Standards: Arista embraces open standards, ensuring compatibility with a wider range of hardware and software solutions while fostering broader customer base and reducing vendor lock-in for clients.
    • Strong Customer Focus: Arista prioritizes customer satisfaction, offering robust technical support and strong focus on building long-term partnerships, fostering loyalty and potentially recurring revenue streams.

    🐌 Key considerations before investing in Arista Networks

    However, like navigating rapidly evolving networking technologies where innovation cycles accelerate constantly, Arista Networks faces significant challenges that cloud investors must evaluate:

    • Networking Market Competition: The data center networking market operates with intense competition from established players like Cisco and emerging challengers vying for market share, requiring continuous innovation and differentiation.
    • Rapid Technological Change: The technology sector is characterized by constant innovation requiring Arista to stay at the forefront of emerging networking trends to maintain market position and competitive advantages.
    • Economic Downturn Vulnerability: Economic slowdowns can lead businesses to delay IT infrastructure upgrades, potentially impacting Arista`s sales and profitability while affecting capital expenditure decisions significantly.
    • Valuation Considerations Risk: As a leading technology company, Arista often trades at premium valuations requiring investors to carefully consider growth prospects and long-term potential before making investment decisions.

    Final thoughts on Arista Networks

    Arista Networks` leadership in cloud networking, commitment to SDN, open standards approach, and strong customer focus create compelling advantages for long-term investors seeking exposure to the data center and cloud computing sectors. However, the competitive landscape, rapid technological change, vulnerability to economic downturns, and premium valuation necessitate careful evaluation of growth prospects and market positioning. Like a master network architect designing resilient infrastructure, Arista continues building the foundation for modern cloud connectivity while navigating the complex challenges of an evolving technology landscape.

  • Oracle (NYSE:ORCL)

    Oracle Corporation is a multinational technology company headquartered in Austin, Texas. Founded in 1977, Oracle is one of the world`s largest providers of enterprise software and cloud solutions. The company initially gained recognition for its pioneering relational database management systems, and over the years, it has expanded its portfolio to include a wide range of cloud computing, software, and hardware products.

    Oracle specializes in offering cloud-based infrastructure, software-as-a-service (SaaS), and database solutions to businesses globally. Its flagship products, such as Oracle Cloud and Oracle Database, enable organizations to manage, analyze, and secure their data efficiently. With a focus on innovation and customer success, Oracle continues to lead the way in providing scalable, integrated solutions for enterprises of all sizes.

    Oracle financial statements

    Analysts recommendation: 1.83

    Financial Health

    • Return on assets (ROA): 7.15%
    • Return on equity (ROE): 69.24%
    • Return on investment (ROI): 10.02%

    Profitability

    • Gross margin: 69.66%
    • Operating margin: 31.38%
    • Net profit margin: 21.08%

    Growth

    • EPS (past 5 years): 7.13%
    • EPS (current): 4.33
    • EPS estimate (next quarter): 1.64
    • EPS growth (this year): -1.9%
    • EPS growth (next year): 17.13%
    • EPS growth (next 5 years): 21.84%
    • EPS growth (quarter-over-quarter): -2.06%
    • Sales growth (past 5 years): 8%
    • Sales growth (quarter-over-quarter): 12.2%

    💡 Why invest in Oracle?

    Like a robust enterprise foundation that powers critical business operations worldwide, Oracle demonstrates compelling strengths for cloud technology investors:

    • Mission Critical Software: Businesses rely on Oracle`s database and enterprise applications to function, making their products irreplaceable for many organizations while generating recurring revenue streams and customer loyalty.
    • Cloud Transition Success: Oracle successfully migrates its enterprise software portfolio to cloud infrastructure, ensuring market relevance while capitalizing on expanding global cloud computing demand and modern deployment preferences.
    • Strong Brand Recognition: The Oracle brand represents enterprise-grade reliability and innovation, providing competitive advantages in customer acquisition, retention, and premium pricing power across global markets.
    • Global Reach Excellence: Oracle operates worldwide with established presence in developed and emerging markets, positioning the company to capitalize on international growth opportunities and digital transformation initiatives.

    🐌 Key considerations before investing in Oracle

    However, like navigating competitive enterprise markets where cloud-native solutions challenge traditional approaches, Oracle faces significant challenges that technology investors must evaluate:

    • Competition Pressure Intensity: Intense competition from Microsoft, Amazon, Google, and cloud-native startups challenges Oracle`s market position through innovative solutions, competitive pricing, and modern architectures.
    • Shifting Customer Preferences: Evolving customer preferences toward cloud-native solutions and subscription models require Oracle to adapt its traditional approach while competing against modern development paradigms and agile competitors.
    • Maturing Market Dynamics: The traditional enterprise software market shows maturation signs with slower growth rates and increased competition that could limit Oracle`s expansion opportunities in core database and applications segments.
    • Integration Challenges Complexity: Complex enterprise system migrations present technical and timeline challenges that can delay customer adoption of Oracle`s cloud solutions and impact implementation success rates and customer satisfaction.

    Final thoughts on Oracle

    Oracle`s strong brand recognition, established customer base, successful cloud transition, and global market presence create compelling advantages for investors seeking exposure to the essential enterprise software sector. However, intense competition from technology giants and cloud-native startups, evolving customer preferences toward modern architectures, and complex enterprise migration challenges present significant headwinds that require careful evaluation. Like a master architect of digital infrastructure, Oracle continues building the foundation for enterprise data management while adapting to the cloud-first future that defines modern business operations.

  • Cloudflare (NYSE:NET)

    Cloudflare, Inc. is a global web infrastructure and security company that enhances the performance, reliability, and safety of internet properties through its expansive content delivery network (CDN), DDoS protection, and security services. The company was founded in 2009 by Matthew Prince, Lee Holloway, and Michelle Zatlyn, and is headquartered in San Francisco, California. From its early days emerging from Project Honey Pot to launching at TechCrunch Disrupt in September 2010, Cloudflare has rapidly scaled its network infrastructure to over 330 data centers across 125+ countries, supporting nearly 20% of all websites globally.

    Cloudflare`s core business centers on delivering a comprehensive suite of cloud, security, and performance services to millions of websites and applications worldwide. Key offerings include its global CDN, robust DDoS mitigation, next-gen Web Application Firewall, domain name services, and edge computing via its Workers platform. The company is also investing in AI-powered tools such as bot detection, API protection, and content scraping defenses to stay ahead in the evolving cybersecurity landscape.

    Cloudflare financial statements

    Analysts recommendation: 2.11

    Financial Health

    • Return on assets (ROA): -2.71%
    • Return on equity (ROE): -8.88%
    • Return on investment (ROI): -2.52%

    Profitability

    • Gross margin: 75.2%
    • Operating margin: -6.67%
    • Net profit margin: -5.12%

    Growth

    • EPS (past 5 years): 8.13%
    • EPS (current): -0.3
    • EPS estimate (next quarter): 0.27
    • EPS growth (this year): 20.53%
    • EPS growth (next year): 29.51%
    • EPS growth (next 5 years): 27.03%
    • EPS growth (quarter-over-quarter): -227.77%
    • Sales growth (past 5 years): 42.21%
    • Sales growth (quarter-over-quarter): 30.7%

    💡 Why invest in Cloudflare?

    Like a global network shield that protects and accelerates internet traffic worldwide, Cloudflare demonstrates compelling strengths for cloud security investors:

    • Robust Growth Trajectory: Cloudflare demonstrates exceptional revenue momentum with 29% growth in 2024 and sustained 25-27% expansion rates, supported by strong enterprise customer acquisition and increasing deal sizes.
    • Strong Product Differentiation: With edge computing, AI integration, and Zero Trust security built into its core platform, Cloudflare remains well-positioned in competitive markets through innovative technology solutions.
    • High Value Customer: Q4 2024 saw a 47% increase in $1M+ customers, with 173 such contracts, including the largest-ever deal exceeding $100M, demonstrating strong enterprise market penetration and customer expansion capabilities.
    • Cash Rich Model: Despite GAAP losses, free cash flow exceeded $166 million in 2024, with non-GAAP earnings turning positive and strong operating leverage indicating improving financial performance and business model efficiency.

    🐌 Key considerations before investing in Cloudflare

    However, prospective investors should weigh the following challenges:

    • GAAP Profitability Negative: While non-GAAP profits improve, Cloudflare still posted GAAP losses, which may concern conservative investors seeking immediate profitability and traditional financial metrics for validation.
    • Potential Valuation Risks: Shares surged approximately 67% year-to-date in 2025, raising the risk of a significant pullback if growth metrics or guidance disappoints investors, creating potential volatility.
    • Guidance Sensitivity Volatility: Q1 2025 projection fell slightly short of analyst expectations, indicating sensitivity to guidance delivery and potential challenges in meeting market forecasts and investor confidence.
    • Intense Competition Pressure: The cybersecurity and edge computing sectors are crowded, with strong competition from established players like Palo Alto, Microsoft, and AWS challenging market share and pricing power.

    Final thoughts on Cloudflare

    Cloudflare has demonstrated strong 2024 growth and entered 2025 with robust momentum, powered by enterprise deals, innovative edge and security offerings, and improving cash flows. Its differentiated, AI-infused platform and customer expansion strategy support long-term scalability and defensibility. However, investors should remain cautious of its GAAP losses, valuation stretch, occasional guidance softening, and intensifying competition in the sector.

  • IBM (NYSE:IBM)

    International Business Machines Corporation (IBM) is a globally renowned technology and consulting company that provides enterprise software, hardware, and cloud computing solutions worldwide. Founded in 1911 as the Computing-Tabulating-Recording Company and headquartered in Armonk, New York, the company was later renamed IBM in 1924. With over a century of innovation, IBM has become a leader in developing advanced technology solutions for businesses across multiple industries.

    IBM specializes in cloud computing, artificial intelligence, quantum computing, and IT services for enterprises across various industries. Its flagship AI platform Watson and hybrid cloud offerings help organizations optimize operations and drive digital transformation. IBM continues to shape technology through research and development, delivering transformative solutions that empower businesses globally.

    IBM financial statements

    Analysts recommendation: 2.48

    Financial Health

    • Return on assets (ROA): 6.35%
    • Return on equity (ROE): 30.16%
    • Return on investment (ROI): 9.22%

    Profitability

    • Gross margin: 57.81%
    • Operating margin: 17.17%
    • Net profit margin: 12.09%

    Growth

    • EPS (past 5 years): -9.46%
    • EPS (current): 8.39
    • EPS estimate (next quarter): 4.33
    • EPS growth (this year): 9.77%
    • EPS growth (next year): 6.93%
    • EPS growth (next 5 years): 7.56%
    • EPS growth (quarter-over-quarter): 614.39%
    • Sales growth (past 5 years): -4.05%
    • Sales growth (quarter-over-quarter): 9.1%

    💡 Why invest in IBM?

    IBM offers several compelling reasons to consider investing:

    • Diversified Technology Portfolio: IBM`s broad range of offerings, from cloud computing to consulting, provides stable revenue streams and reduces dependency on any single market segment or technology area globally.
    • Innovation Technology Focus: The company`s investments in cutting-edge fields like AI and quantum computing demonstrate a commitment to staying at the forefront of technological advancements and emerging technologies.
    • Strong Enterprise Relationships: IBM`s established partnerships with large organizations worldwide give it a competitive edge in delivering scalable enterprise solutions and comprehensive technology services globally.
    • Attractive Dividend Yield: IBM`s consistent dividend payments appeal to income-focused investors, making it a reliable choice for long-term portfolios seeking steady income and capital preservation strategies.

    🐌 Key considerations before investing in IBM

    However, prospective investors should weigh the following challenges:

    • Slower Revenue Growth: Compared to other tech giants, IBM has struggled with consistent revenue growth, raising concerns about its competitiveness in high-growth markets and emerging technology sectors globally.
    • Acquisition Integration Complexity: Acquisitions like Red Hat require significant integration efforts, which could delay expected synergies or result in unforeseen costs and operational disruptions across business units.
    • Cloud Market Competition: IBM faces intense competition from both established tech companies and agile startups, particularly in the cloud computing and AI sectors where innovation moves rapidly worldwide consistently.
    • Legacy Business Dependence: Despite its modernization efforts, IBM still relies on some legacy businesses, which may weigh on its overall performance and limit growth potential in emerging markets globally and domestically.

    Final thoughts on IBM

    IBM is a legacy technology company with a strong global presence and a diversified portfolio that spans innovative and traditional markets. Its emphasis on cloud computing, AI, and quantum computing positions it well for future growth, particularly as businesses accelerate their digital transformations. However, challenges like slower revenue growth, high competition, and legacy dependencies are factors investors should consider when evaluating IBM`s potential.

  • Google (NYSE:GOOG)

    Google LLC, a subsidiary of Alphabet Inc, is a global technology company that provides internet-related services and products including search engines, cloud computing, software, and advertising technologies. Founded in 1998 by Larry Page and Sergey Brin while they were PhD students at Stanford University, Google began as a search engine and quickly became a dominant force in the technology industry. The company has expanded its offerings to include cloud computing, software, hardware, and advertising services that serve billions of users worldwide.

    Google operates diverse products beyond its famous search engine. The company leverages artificial intelligence and machine learning technologies. Google shapes digital transformation across industries worldwide.

    Google financial statements

    Analysts recommendation: 1.46

    Financial Health

    • Return on assets (ROA): 16.28%
    • Return on equity (ROE): 35.45%
    • Return on investment (ROI): 28.86%

    Profitability

    • Gross margin: 59.17%
    • Operating margin: 30.51%
    • Net profit margin: 32.23%

    Growth

    • EPS (past 5 years): 26.76%
    • EPS (current): 10.12
    • EPS estimate (next quarter): 2.26
    • EPS growth (this year): 35.3%
    • EPS growth (next year): 8.68%
    • EPS growth (next 5 years): 15.28%
    • EPS growth (quarter-over-quarter): 22.28%
    • Sales growth (past 5 years): 16.73%
    • Sales growth (quarter-over-quarter): 15.9%

    💡 Why invest in Google?

    Google`s grip on online advertising, cloud computing prowess, relentless innovation, and diversified portfolio create a compelling investment case:

    • Advertising Market Dominance: Google dominates the global online advertising market with unparalleled reach and sophisticated data-driven targeting capabilities, securing robust foundations for consistent revenue streams.
    • Cloud Platform Growth: Google Cloud Platform rapidly expands market share by offering robust, scalable enterprise solutions, unlocking vast growth potential in the booming cloud computing market and digital transformation.
    • Technology Innovation Leadership: Google consistently pioneers breakthrough technologies including artificial intelligence, machine learning, and autonomous vehicle development, ensuring continued market relevance and competitive advantages.
    • Diversified Product Portfolio: Google`s diversified portfolio spans YouTube, Android, hardware ventures, and emerging technologies, effectively mitigating sector-specific risks while providing broad exposure to digital trends.

    🐌 Key considerations before investing in Google

    While Google`s strengths are undeniable, some factors merit careful consideration:

    • Elevated Valuation Metrics: Like many established tech giants, GOOG`s stock currently sits near all-time highs, demanding a cautious approach due to potentially limited immediate gains. A patient, long-term perspective might be wise.
    • Regulatory Compliance Challenges: Google`s market dominance and data collection practices attract intense regulatory scrutiny and antitrust investigations worldwide, creating operational uncertainties and potential business restrictions.
    • Cloud Market Rivalry: Established competitors like Amazon Web Services and Microsoft Azure maintain significant market advantages, requiring Google Cloud to invest heavily in innovation and competitive pricing.
    • Advertising Budget Vulnerability: Economic downturns can significantly reduce corporate advertising budgets and cloud service investments, potentially impacting Google`s revenue growth and profitability across primary business segments.

    Final thoughts on Google

    Google`s advertising dominance, cloud computing growth, and technological innovation create compelling long-term investment opportunities in the digital economy. However, regulatory scrutiny, competitive pressures, and economic sensitivity require careful risk assessment and strategic patience. Like a digital lighthouse guiding ships through vast information oceans, Google illuminates pathways to knowledge while navigating complex technological and regulatory waters.

  • Microsoft (NYSE:MSFT)

    Microsoft Corporation is a global technology company that develops software, cloud computing services, and hardware products for consumers and enterprises worldwide. Founded in 1975 by Bill Gates and Paul Allen and headquartered in Redmond, Washington, Microsoft revolutionized the software industry with its Windows operating system. The company has since expanded into cloud computing, hardware, and digital services, becoming one of the largest and most influential technology firms globally.

    Microsoft specializes in software products like Windows and Office, cloud services through Azure, and hardware including Surface devices and Xbox consoles. The company leads in cloud computing by offering comprehensive cloud-based services for businesses and developers across multiple industries. Microsoft continues to drive technological advancements and digital transformation through innovation, empowering people and organizations to achieve more.

    Microsoft financial statements

    Analysts recommendation: 1.13

    Financial Health

    • Return on assets (ROA): 14.66%
    • Return on equity (ROE): 32.24%
    • Return on investment (ROI): 22.47%

    Profitability

    • Gross margin: 68.76%
    • Operating margin: 48.87%
    • Net profit margin: 35.71%

    Growth

    • EPS (past 5 years): 18.8%
    • EPS (current): 14.08
    • EPS estimate (next quarter): 3.91
    • EPS growth (this year): 12.7%
    • EPS growth (next year): 17.18%
    • EPS growth (next 5 years): 17.4%
    • EPS growth (quarter-over-quarter): 12.55%
    • Sales growth (past 5 years): 14.52%
    • Sales growth (quarter-over-quarter): 18.4%

    💡 Why invest in Microsoft?

    Microsoft presents a compelling investment case due to its unwavering revenue streams, cutting-edge AI ventures, thriving gaming presence, and unwavering commitment to innovation:

    • Strong Recurring Revenue: Microsoft`s financial stability rests on Office 365 and Azure cloud platform, generating consistent recurring income while capturing significant market share in the rapidly expanding global cloud sector.
    • AI Technology Leadership: Microsoft`s strategic investments in OpenAI and ChatGPT integration into Bing demonstrate forward-thinking AI leadership, positioning the company to challenge Google`s search dominance effectively.
    • Gaming Division Strength: Microsoft`s Xbox division thrives with Series X/S success and Game Pass cloud gaming ecosystem. This diversified gaming presence creates powerful revenue streams and insulates against market fluctuations.
    • Strong Market Adaptability: Microsoft consistently adapts and innovates across AI, cloud computing, and productivity tools. This agility enables continuous growth, market share expansion, and relevance in the dynamic tech landscape.

    🐌 Key considerations before investing in Microsoft

    While Microsoft`s strengths are undeniable, some factors merit careful consideration:

    • Azure Competition Pressure: Azure faces fierce competition from AWS, Google Cloud, and other established players in the crowded cloud computing market, requiring continuous innovation and competitive pricing strategies.
    • Regulatory Compliance Scrutiny: Large acquisitions like Activision Blizzard face lengthy regulatory approval processes and potential challenges that could significantly impact future growth plans and strategic partnerships.
    • High Valuation Premium: Microsoft`s stock trades near all-time highs with limited room for immediate significant gains, suggesting investors should consider waiting for more attractive entry points before investing.
    • Recession Revenue Risk: Economic downturns could reduce corporate and consumer technology spending, affecting Azure and Office 365 subscriptions and making revenue vulnerable to broader economic trends and cycles.

    Final thoughts on Microsoft

    Microsoft`s diverse revenue streams, AI leadership, and market adaptability make it a compelling long-term investment opportunity. However, intense cloud competition, regulatory scrutiny, and elevated valuation levels present notable challenges requiring careful consideration. Like a seasoned conductor orchestrating multiple instruments, Microsoft harmonizes various business segments to create a symphony of sustainable growth and innovation.

  • SAP (DE:SAP)

    SAP SE is a leading European software company that provides enterprise resource planning and cloud computing solutions to organizations worldwide. Founded in 1972 by five former IBM engineers and headquartered in Walldorf, Germany, SAP has grown into one of the world`s largest enterprise software providers. The company serves organizations in over 180 countries with its flagship ERP suite SAP S/4HANA and comprehensive business software solutions.

    SAP specializes in cloud-based customer experience solutions, AI-driven data analytics, and tools for sustainability and intelligent automation across multiple industries. The company`s offerings help businesses integrate operations, finance, human resources, and supply chain management through advanced in-memory processing and analytics capabilities. SAP empowers clients to achieve digital transformation while upholding European standards of data privacy and security compliance.

    SAP financial statements

    Analysts recommendation: 1.62

    Financial Health

    • Return on assets (ROA): 9.06%
    • Return on equity (ROE): 17.03%
    • Return on investment (ROI): 13.66%

    Profitability

    • Gross margin: 73.83%
    • Operating margin: 28.27%
    • Net profit margin: 19.41%

    Growth

    • EPS (past 5 years): -1.42%
    • EPS (current): 6.04
    • EPS estimate (next quarter): 1.78
    • EPS growth (this year): 37.9%
    • EPS growth (next year): 18.91%
    • EPS growth (next 5 years): 28.24%
    • EPS growth (quarter-over-quarter): 46.46%
    • Sales growth (past 5 years): 3.69%
    • Sales growth (quarter-over-quarter): 7.2%

    💡 Why invest in SAP?

    Key strengths that make SAP an attractive investment:

    • ERP Market Leadership: SAP dominates the global ERP market, with a strong foothold among Fortune 500 companies and major enterprises worldwide, providing comprehensive business solutions and digital transformation.
    • Robust Cloud Transition: Its shift to cloud-native platforms anchored by SAP S/4HANA Cloud drives recurring subscription revenue and long-term growth potential across enterprise markets globally and consistently.
    • Advanced AI Analytics: Embedded machine learning and advanced analytics across its portfolio enhance automation, predictive insights, and real-time decision-making capabilities for enterprises worldwide.
    • Strong Financial Profile: Consistent subscription and maintenance revenues underpin stable cash flows, a solid balance sheet, and shareholder returns via dividends across market cycles consistently and reliably.

    🐌 Key considerations before investing in SAP

    Potential challenges and risks to consider:

    • Competitive Cloud Landscape: SAP faces intense competition in cloud services from Microsoft Azure, Amazon Web Services, Oracle, and Salesforce, requiring continuous innovation and investment globally and consistently.
    • Complex Implementation Challenges: Large-scale SAP deployments can be costly and time-intensive, posing barriers for small and mid-market customers seeking enterprise solutions and digital transformation initiatives.
    • Enterprise Customer Dependency: A significant share of revenue comes from large corporations, making SAP sensitive to macroeconomic swings in IT spending and budget constraints across markets globally and consistently.
    • Cloud Adoption Challenges: While accelerating, SAP`s overall migration from on-premises to cloud solutions trails some purely cloud-native rivals in market adoption and customer preference globally and consistently.

    Final thoughts on SAP

    SAP SE combines deep European roots and a storied history in enterprise software with a forward-looking cloud and AI strategy. Its leadership in ERP, expanding cloud footprint, and strong financials make it a compelling choice for investors seeking exposure to digital transformation trends, particularly those valuing European data-privacy standards and sustainability commitments. Nonetheless, prospective investors should weigh competitive pressures, implementation complexities, and macroeconomic sensitivities before taking a long-term position.

  • Rubrik (NYSE:RBRK)

    Rubrik, Inc. is a cloud data management and cyber-resilience company that provides comprehensive data protection and security solutions for enterprises worldwide. Founded in 2014 in Palo Alto, California, by Bipul Sinha, Arvind Jain, Soham Mazumdar, and Arvind Nithrakashyap, the company has rapidly established itself as a leader in the data protection market. The company went public via a NYSE IPO in April 2024 and saw remarkable stock performance, with its total return soaring approximately 194% over the past 12 months, significantly outperforming the S&P 500.

    Rubrik`s core business centers on converged data management and data security, providing hybrid cloud solutions that integrate backup, recovery, and continuous cyber protection. Its Zero Trust Data Security platform enables live data access and protection across on-premises and cloud environments, supporting resilience against cyberattacks and operational disruptions. With a rapidly expanding customer base and strong ARR growth, Rubrik empowers enterprises to secure, manage, and leverage their data efficiently in increasingly complex IT landscapes.

    Rubrik financial statements

    Analysts recommendation: 1.32

    Financial Health

    • Return on assets (ROA): -14.85%
    • Return on equity (ROE): N/A
    • Return on investment (ROI): -75.09%

    Profitability

    • Gross margin: 77.96%
    • Operating margin: -30.49%
    • Net profit margin: -41%

    Growth

    • EPS (past 5 years): -57.67%
    • EPS (current): -1.08
    • EPS estimate (next quarter): -0.17
    • EPS growth (this year): 69.56%
    • EPS growth (next year): 77.37%
    • EPS growth (next 5 years): N/A
    • EPS growth (quarter-over-quarter): 49.97%
    • Sales growth (past 5 years): 22.97%
    • Sales growth (quarter-over-quarter): 51.2%

    💡 Why invest in Rubrik?

    Rubrik offers several compelling reasons to consider investing:

    • Accelerating Subscription Growth: Subscription ARR surged 54% year-over-year in fiscal 2025, signaling strong demand and successful upsell execution while demonstrating the company`s ability to expand within existing customer accounts.
    • Cloud Native Platform: Rubrik`s data protection platform is built for modern hybrid environments, appealing to enterprises seeking security and resilience through innovative Zero Trust architecture and data management.
    • Improving Financial Performance: Significant progress in operating leverage led to free cash flow of $75 million in Q4 and narrower losses per share, indicating strong business model efficiency and path toward sustainable profitability.
    • High Customer Retention: Consistent NRR above 120% and expansion into large enterprise segments with 2,246 customers generating over $100K ARR demonstrates strong customer loyalty and revenue growth potential.

    🐌 Key considerations before investing in Rubrik

    However, prospective investors should weigh the following challenges:

    • GAAP Profitability Challenges: Despite improving margins, the company remains GAAP unprofitable, with a full-year loss per share of $(7.48) and elevated stock compensation costs that continue to pressure financial performance.
    • Highly Competitive Market: Rubrik competes with major players like Commvault, Veeam, and new entrants, requiring constant innovation to maintain differentiation while facing pricing pressure and market share challenges.
    • Operational Scaling Risks: Rapid growth demands could strain support infrastructure and service delivery capabilities, as hinted by some customer service complaints, potentially impacting customer satisfaction and retention rates.
    • High Valuation Sensitivity: A recent 48% stock surge in 2025 suggests elevated growth expectations that could reverse with any setback, creating significant downside risk if the company fails to meet ambitious market forecasts.

    Final thoughts on Rubrik

    Rubrik has emerged as a fast-growing leader in cloud-native data resilience, showing substantial ARR growth, improving financial discipline, and strong customer loyalty. Its differentiated Zero Trust platform positions it well in an expanding cybersecurity market. Investors should, however, be mindful of its ongoing GAAP losses, competitive pressures, service delivery execution, and valuation dependence on milestone execution.

  • Zscaler (NYSE:ZS)

    Zscaler, Inc. is a cloud-native cybersecurity company delivering comprehensive security services via its Zero Trust Exchange platform to enterprises across more than 125 countries. Founded in 2007 and headquartered in San Jose, California, Zscaler has rapidly scaled its network to over 330 data centers worldwide. In the past year, its stock has seen a total return of approximately +75%, significantly outperforming the S&P500 (~14%), and its share price has climbed about +64% year-to-date, reflecting strong investor confidence.

    Zscaler`s core business is centered on delivering cloud-based security solutions that replace traditional on-premises architectures with scalable, automated protective services. Its platform includes Zero Trust Internet Access, Private Access, and Security Service Edge (SSE), protecting user connections, cloud workloads, and web applications from threats using AI, machine learning, and extensive threat intelligence. By continuously enhancing its capabilities such as adding SASE and AI-powered bot detection Zscaler empowers organizations to securely embrace cloud transformation and remote work.

    Zscaler financial statements

    Analysts recommendation: 1.63

    Financial Health

    • Return on assets (ROA): -1.37%
    • Return on equity (ROE): -2.7%
    • Return on investment (ROI): -1.17%

    Profitability

    • Gross margin: 76.99%
    • Operating margin: -3.62%
    • Net profit margin: -1.55%

    Growth

    • EPS (past 5 years): 21.31%
    • EPS (current): -0.26
    • EPS estimate (next quarter): 0.86
    • EPS growth (this year): 11.4%
    • EPS growth (next year): 20.28%
    • EPS growth (next 5 years): 18.11%
    • EPS growth (quarter-over-quarter): -14.36%
    • Sales growth (past 5 years): 44.03%
    • Sales growth (quarter-over-quarter): 21.3%

    💡 Why invest in Zscaler?

    Zscaler offers several compelling reasons to consider investing:

    • Rapid Revenue Growth: After 34% revenue growth in 2024, Zscaler reached $2.17B, supported by broad enterprise adoption of SASE and Zero Trust platforms while expanding its global customer base and market penetration significantly.
    • Zero Trust Leadership: The company is consistently ranked a market leader, with its cloud-native platform processing trillions of transactions daily a strong competitive moat and technological differentiation.
    • Innovative Product Expansions: Strategic partnerships with companies like Vectra AI and acquisitions like Red Canary reinforce its threat detection and cybersecurity ecosystem, enhancing platform capabilities and market competitiveness.
    • Recurring Subscription Model: High renewal rates and expanding billings maintain predictable, recurring revenue streams and strong deferred revenue growth, providing financial stability and visibility for long-term business planning.

    🐌 Key considerations before investing in Zscaler

    However, prospective investors should weigh the following challenges:

    • Revenue Growth Deceleration: After 2024 growth, revenue fell approximately 8% year-over-year by April 2025, indicating slower momentum and potential market saturation that could impact future growth prospects and investor confidence.
    • Profitability Challenges Persist: The firm remains loss-making under GAAP accounting, with non-GAAP adjustments masking core losses, raising concerns about underlying profitability and sustainable business model economics.
    • Competitive Market Pressures: Zscaler faces pressure from major players like Palo Alto Networks, Microsoft, and emerging rivals like Wiz, challenging market share and pricing power in competitive cybersecurity segments.
    • Valuation Premium Risks: Its high-growth premium has cooled, evidenced by a 16% stock decline in 2024 and post-earnings dips on conservative guidance, creating valuation risk if growth expectations are not met consistently.

    Final thoughts on Zscaler

    Zscaler stands as a leading innovator in cloud-based security with a scalable subscription model, strong platform differentiation, and solid 2024 expansion. While growth has moderated in early 2025 and the company remains non-GAAP profitable, its focus on AI-driven capabilities and platform integration positions it well for future enterprise adoption. However, investors should weigh valuation normalization, ongoing GAAP losses, and intensifying competitive pressures when assessing Zscaler`s long-term investment potential.

  • ServiceNow (NYSE:NOW)

    ServiceNow Inc is a leading provider of cloud-based enterprise workflow automation solutions that help organizations streamline operations and improve productivity worldwide. Founded in 2004 by Fred Luddy and headquartered in Santa Clara, California, the company has revolutionized digital workflows with its comprehensive platform. ServiceNow`s suite of applications and tools focuses on improving productivity and delivering better customer and employee experiences through automation and intelligent workflows.

    The company specializes in delivering enterprise cloud services for IT service management, human resources, customer service, and security operations across multiple industries. ServiceNow`s platform integrates AI and machine learning to automate complex processes, enabling businesses to operate more efficiently and adapt to changing market needs. With a strong emphasis on innovation and continuous platform development, ServiceNow helps organizations digitally transform their operations for improved agility and business outcomes.

    ServiceNow financial statements

    Analysts recommendation: 1.37

    Financial Health

    • Return on assets (ROA): 5.65%
    • Return on equity (ROE): 16.81%
    • Return on investment (ROI): 12.73%

    Profitability

    • Gross margin: 78.05%
    • Operating margin: 16.79%
    • Net profit margin: 13.66%

    Growth

    • EPS (past 5 years): 16.56%
    • EPS (current): 8.27
    • EPS estimate (next quarter): 4.41
    • EPS growth (this year): 15.9%
    • EPS growth (next year): 17.49%
    • EPS growth (next 5 years): 20.61%
    • EPS growth (quarter-over-quarter): 15.68%
    • Sales growth (past 5 years): 25.99%
    • Sales growth (quarter-over-quarter): 21.8%

    💡 Why invest in ServiceNow?

    Several key factors make ServiceNow an attractive prospect for investors seeking exposure to the growing cloud software market:

    • Enterprise Workflow Leadership: ServiceNow boasts a dominant market share in the cloud-based enterprise workflow management space, offering a comprehensive and scalable platform for digital transformation initiatives.
    • Subscription Revenue Model: Their recurring subscription fees provide predictable and consistent revenue streams, enabling sustainable growth and long-term customer relationships across enterprise markets globally.
    • Platform Innovation Focus: The Now Platform`s continuous development ensures ServiceNow remains at the forefront of technological advancements and emerging enterprise automation trends worldwide consistently.
    • Strong Developer Ecosystem: A vibrant developer community fosters innovation and expands the platform`s capabilities through custom applications and third-party integrations across industries globally and effectively.

    🐌 Key considerations before investing in ServiceNow

    While ServiceNow`s leadership position, subscription model, and focus on innovation are strengths, there are challenges to consider:

    • Legacy Vendor Competition: Established software companies are increasingly offering cloud-based solutions, posing a competitive threat to ServiceNow`s market position and growth opportunities worldwide consistently.
    • System Integration Complexity: Integrating ServiceNow with existing enterprise systems can be complex and time-consuming, potentially hindering adoption and implementation timelines for customers globally and domestically.
    • Data Security Concerns: As a cloud-based platform, ServiceNow faces the ever-present challenge of ensuring data security and compliance with evolving regulatory requirements globally and domestically consistently.
    • High Valuation Concerns: ServiceNow`s stock price has experienced significant growth, and some investors might consider it overvalued relative to current market conditions and growth prospects globally and domestically.

    Final thoughts on ServiceNow

    ServiceNow`s leadership position, subscription model, and focus on platform innovation create compelling advantages for long-term investors seeking exposure to the essential enterprise software market. However, competition from established players, integration complexity, security concerns, and potential valuation concerns necessitate careful evaluation of growth prospects and market positioning. Like a master conductor orchestrating digital transformation across enterprises, ServiceNow continues building the foundation for modern workflow automation while navigating the complex challenges of an evolving technology landscape.

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