Cloud computing refers to the on-demand seamless access of computing resources such as servers, storage, databases, networking, software, analytics and intelligence over the Internet (the cloud) on a pay-per-use pricing model. It marks a paradigm shift from traditional on-premises infrastructure storage to remote cloud-based storage facilities and relies heavily on virtualization and automation technologies.
Instead of buying, owning and maintaining physical data centers and servers, organizations access a virtual pool of shared resources on an as-needed basis from a cloud service provider. This lowers operating costs, increases productivity with greater agility and flexibility, and improves scalability with higher economies of scale.
We have narrowed our search to five cloud computing-centric stocks that are set to provide stellar returns in the short term. These are: Five9 Inc. FIVN, NetScout Systems Inc. NTCT, Parsons Corp. PSN, Booz Allen Hamilton Holding Corp. BAH and Okta Inc. OKTA.
Cloud Computing Industry in a Nutshell
Cloud computing is a system primarily comprising three services: software-as-a-service (SaaS), infrastructure-as-a-service (IaaS), and platform-as-a-service (PaaS). SaaS provides license of a software application to customers using a pay-as-you-go model or on-demand.
IaaS provides operating systems to servers and storage through IP-based connectivity as part of an on-demand service. PaaS is a platform for creating software delivered through the Internet.
5 Cloud Computing Stocks to Buy
These stocks have strong earnings and revenue growth potential for 2025. Moreover, they have seen positive earnings estimate revisions for 2025 in the last 60 days. Each of our picks currently carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our picks in the past six months.
Image Source: Zacks Investment Research
Five9 Inc.
Zacks Rank #1 Five9 provides intelligent cloud software for contact centers in the United States, India, and internationally. FIVN offers a virtual contact center cloud platform that delivers a suite of applications, which enable the breadth of contact center-related customer service, sales, and marketing functions.
FIVN’s platform comprises interactive virtual agents, agent assist, workflow automation, workforce engagement management, AI insights and AI summaries. It allows managing and optimizing customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces.
FIVN saw its subscription revenues increase by 20% in third-quarter 2024, with total revenues up 15%. FIVN posted an adjusted EBITDA margin of 20%, helping it produce an operating cash flow of $41 million. Management raised its outlook for 2025.
Impressive Short-Term Upside for FIVN Stock
Five9 has an expected revenue and earnings growth rate of 10.4% and 8.2%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 3.2% over the last 60 days.
The average short-term price target of brokerage firms represents an increase of 22.4% from the last closing price of $42.61. The brokerage target price is currently in the range of $40 to $67. This indicates a maximum upside of 57.2% and a downside of 6.1%.
NetScout Systems Inc.
Zacks Rank #1 NetScout Systems is a leading provider of business assurance — a powerful combination of service assurance, cybersecurity, and business intelligence solutions — for today's most demanding service provider, enterprise and government networks.
NTCT’s Adaptive Service Intelligence technology continuously monitors the service delivery environment to identify performance issues and provides insight into network-based security threats, helping teams to quickly resolve issues that can cause business disruptions or impact user experience. NTCT delivers unmatched service visibility and protects the digital infrastructure that supports our connected world.
Robust Short-Term Upside for NTCT Shares
NetScout Systems has an expected revenue and earnings growth rate of 10.4% and 8.2%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 3.2% over the last 60 days.
The average short-term price target of brokerage firms represents an increase of 34.1% from the last closing price of $22.69. The brokerage target price is currently in the range of $22 to $38. This indicates a maximum upside of 67.5% and a downside of 3%.
Parsons Corp.
Zacks Rank #1 Parsons is a provider of technology-driven solutions. PSN is focused on the defense, intelligence and critical infrastructure markets. PSN provides integrated solutions and services in North America, the Middle East, and internationally. PSN operates through Federal Solutions and Critical Infrastructure segments.
PSN offers technical design and engineering services and software which consists of cybersecurity, intelligence, defense, military training, connected communities, physical infrastructure and mobility solutions.
Solid Short-Term Upside for PSN Stock
Parsons has an expected revenue and earnings growth rate of 6.8% and 11.9%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 2.4% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 22.7% from the last closing price of $97.92. The brokerage target price is currently in the range of $101 to $130. This indicates a maximum upside of 32.8% and no downside.
Booz Allen Hamilton Holding Corp.
Zacks Rank #2 Booz Allen Hamilton Holding offers a solid investment option for those seeking stability, as the business is driven by long-term government contracts, and a strong reputation in defense and cybersecurity. BAH’s focus on operational efficiency, and investments in artificial intelligence and cybersecurity have positioned it for sustainable growth.
BAH is benefiting from its Vision 2020 strategy, which has accelerated organic revenue growth, strengthened its profitability and fetched significant headcount and backlog growth. BAH’s VoLT strategy focuses on integrating velocity, leadership and technology in the process of transformation.
Huge Short-Term Upside for BAH Shares
Booz Allen Hamilton Holding has an expected revenue and earnings growth rate of 12.6% and 13.6%, respectively, for the current-year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.6% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 32.6% from the last closing price of $135.56. The brokerage target price is currently in the range of $151 to $210. This indicates a maximum upside of 54.9% and no downside.
Okta Inc.
Zacks Rank #2 Okta operates as an identity partner in the United States and internationally. OKTA offers a suite of products and services used to manage and secure identities, such as Single Sign-On, which enables users to access applications in the cloud or on-premises from various devices.
OKTA’s Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data, while API Access Management enables organizations to secure APIs. Access Gateway enables organizations to extend Workforce Identity Cloud, and Okta Device Access enables end users to securely log in to devices with Okta credentials. OKTA also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization.
Excellent Short-Term Upside for OKTA Stock
Okta has an expected revenue and earnings growth rate of 6.8% and 4.9%, respectively, for the next fiscal year (ending January 2026). The Zacks Consensus Estimate for next-year earnings has improved 2.5% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 26% from the last closing price of $84.76. The brokerage target price is currently in the range of $75 to $140. This indicates a maximum upside of 65.2% and a downside of 11.5%.
Zacks Naming Top 10 Stocks for 2025
Want to be tipped off early to our 10 top picks for the entirety of 2025?
History suggests their performance could be sensational.
From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>NetScout Systems, Inc. (NTCT) : Free Stock Analysis Report
Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report
Five9, Inc. (FIVN) : Free Stock Analysis Report
Okta, Inc. (OKTA) : Free Stock Analysis Report
Parsons Corporation (PSN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
