Expert Sees A $25 Billion Cloud Windfall Coming For Amazon, Microsoft And Google

In a new report, Pacific Crest analyst Brent Bracelin discussed the huge opportunities in cloud computing and which stocks will be the beneficiaries. According to Bracelin, 2016 will be the beginning of the next major business cloud adoption cycle, and top 20 cloud capex could rise 21 percent this year.

“Billions of IT dollars should shift out of legacy IT as application workloads move to the cloud,” Bracelin explained. He predicts Infrastructure-as-a-Service (IaaS) revenue will increase by three times for Amazon.com, Inc. (NASDAQ: AMZN), four times for Microsoft Corporation (NASDAQ: MSFT) and five times for Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) in the next few years.

Overall, he sees a $25 billion opportunity for these three market leaders in coming years.

Related Link: Diving Deep Into Amazon's AWS Pricing Model

Alphabet, Amazon And Microsoft Could Take Market Share Away From These Issues

In terms of market share, Bracelin says that the three Overweight-rated stocks mentioned above will continue to take share away from Sector Weight-rated donors EMC Corporation (NYSE: EMC), Hewlett Packard Enterprise Co (NYSE: HPE) and NetApp Inc. (NASDAQ: NTAP).

Other Names

However, Pacific Crest sees plenty of other cloud-related investment opportunities outside of the big three names, including Overweight-rated Intel Corporation (NASDAQ: INTC), Western Digital Corp (NASDAQ: WDC), Arista Networks Inc (NYSE: ANET), Digital Realty Trust, Inc. (NYSE: DLR), QTS Realty Trust Inc (NYSE: QTS) and Equinix Inc (NASDAQ: EQIX).

Disclosure: The author holds no position in the stocks mentioned.

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