3 Cloud and AI Stocks to Buy Hand Over Fist in February

Core Insights - The cloud and AI markets are experiencing significant growth, with companies increasingly migrating data to public cloud platforms, leading to the development of more AI applications [2][3] - Microsoft, Datadog, and Oracle are identified as strong companies well-positioned to benefit from the growth in these markets [4] Microsoft - Microsoft has transformed Azure into the world's second-largest cloud infrastructure platform and integrated OpenAI's generative AI tools into its ecosystem [5] - In the latest quarter, Microsoft's total cloud revenue increased by 21% year over year, accounting for 59% of its total revenue, driven by Azure, Dynamics, and 365 productivity apps [6] - Analysts project Microsoft's revenue and EPS to grow at a CAGR of 14% from fiscal 2024 to fiscal 2027, supported by its cloud and AI businesses, Xbox division, and enterprise cloud services [7] Datadog - Datadog's platform aggregates diagnostic data across various computing platforms, simplifying problem diagnosis for IT professionals, enhanced by its new Bits AI generative AI chatbot [8] - The company turned profitable on a GAAP basis in 2023, with analysts expecting revenue and EPS to grow at a CAGR of 23% and 77%, respectively, from 2023 to 2026 [9] - Datadog's growth is driven by customers generating at least $100,000 in annual recurring revenue and a strong dollar-based net retention rate in the mid-110s [10] Oracle - Oracle has revitalized its growth by transitioning from on-premises software to cloud-based services and expanding into ERP, healthcare IT, and cloud infrastructure through acquisitions [12] - Analysts forecast Oracle's revenue and EPS to rise at a CAGR of 12% and 20%, respectively, from fiscal 2024 to fiscal 2027, fueled by demand for cloud-based database and ERP services [13] - Despite its cloud infrastructure being smaller than AWS and Azure, Oracle has secured major clients like Nvidia and Uber, and is expanding its offerings to support generative AI applications [14][15]