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No. of Recommendations: 4
Is cloud in a bubble?

https://www.cnbc.com/2018/04/26/aws-earnings-q1-2018.html

Amazon Web Services reported sales on Thursday of $5.44 billion, compared to the $5.26 billion average estimate of analysts surveyed by FactSet. AWS contributed about 11 percent of Amazon's total revenue for the period, up from 8.5 percent in the prior quarter.

AWS continues to be a big revenue driver and even larger profit engine for its parent company, which dominates the low-margin e-commerce market. In cloud-computing infrastructure, Amazon has a substantial market share lead over Microsoft Azure, Google's Cloud platform and IBM, as well as other players like Alibaba and Oracle.

While AWS has maintained growth above 40 percent, Microsoft and Google are currently expanding much faster and picking up share.

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AWS is just a segment of Amazon. How many NPI or Saul companies have $5.44B in sales total?

And then Microsoft reported...here is some Azure numbers:
https://finance.yahoo.com/news/microsoft-earnings-q3-2018-ea...

Microsoft’s intelligent cloud division saw revenue of $7.9 billion, an increase of 17%. Helping to push the segment higher were a 20% increase in server product and cloud services revenue and a 93% increase in Azure revenue growth.

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Google doesn't break out cloud much yet...likely waiting for number to get bigger, but stated in Q4 that it was already over $1b.

https://siliconangle.com/blog/2018/04/23/googles-ad-cloud-bu...

“Other revenues” rose 36 percent, to $4.4 billion. Given that Google announced cloud revenues hit $1 billion a quarter last quarter, they likely were a significant contributing factor. “In Q1, we saw increasing momentum,” Google Chief Executive Officer Sundar Pichai (pictured) said on the earnings call.

Pichai said the unit is signing more and bigger deals, thanks to the popularity of its cloud machine learning services and its G Suite productivity software as a service. For G Suite, he added, “Growth is at an inflection point,” and is helping to drive more customers to the Google Cloud Platform overall.

He added that cloud platform growth overall has been “very strong” thanks to what he termed an advantage in data analytics and machine learning. “Security is becoming a big differentiator for us as well,” he said.

If Google’s cloud results were positive as Pichai implied, they would bode well for earnings reports coming up on Thursday from the two biggest cloud providers, Amazon.com Inc. and Microsoft Corp.

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All this is mainly IaaS revenue. Add in CRM and all the other SaaS and Cloud Security companies, PaaS, etc etc... I think cloud is growing rapidly. To me, a bubble is unjustified prices...you can argue P/S levels but definitely appears growth in cloud-related companies is very strong.

Dreamer
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