3 Red-Hot Cloud Infrastructure Stocks Powering 2025 Growth

Industry Overview - The global cloud computing market is projected to nearly double from 2023 to 2028, reaching approximately $1.3 trillion by the end of that period, driven by increasing demand for cloud computing services [1] - Despite the cloud industry's establishment, competition among cloud infrastructure firms remains, with opportunities for new technological developments and market expansion [2] Company Analysis: Applied Digital Corp. - Applied Digital Corp. has a market capitalization of $1.2 billion and is recognized as a significant provider of data centers and AI cloud services, receiving unanimous support from Wall Street analysts with a consensus price target over double its current price [4] - The 12-month stock price forecast for Applied Digital is $10.67, indicating a potential upside of 102.79% from the current price of $5.26, with a high forecast of $20.00 and a low of $7.00 [5] - The company focuses on data centers for major tech firms like Amazon and Meta, which are investing tens of billions in cloud and AI infrastructure [5] - Applied Digital has experienced mixed stock performance, with a 68% gain over the last year but a decline of about 33% year-to-date, attributed to a disconnect between investor expectations and the company's results [6] - In the latest quarter, Applied Digital missed revenue expectations despite a year-over-year increase of over 22%, while its net loss per share was better than expected, raising questions about its future direction, including potential divestment of its cloud services business [7] Company Analysis: Couchbase Inc. - Couchbase Inc. offers database-as-a-service products for enterprise applications, allowing customers to manage Couchbase Server across various cloud environments [9] - The 12-month stock price forecast for Couchbase is $21.41, suggesting a 23.87% upside from the current price of $17.29, with a high forecast of $26.00 [10] - Couchbase reported a 16% year-over-year revenue improvement and a 17% growth in annual recurring revenue, indicating strong customer relationships [10] - The company has narrowed its operational losses but continues to face cash flow challenges, with a recent focus on its Edge server for offline low-latency data access [11][12] Company Analysis: Fastly Inc. - Fastly Inc. operates in the edge cloud platform space, generating revenue primarily from content delivery and security services [13] - The 12-month stock price forecast for Fastly is $8.28, indicating a 39.24% upside from the current price of $5.95, with a high forecast of $12.00 [14] - Fastly faces challenges with negative operating income and declining revenue from larger clients, leading to a consensus "Hold" rating from analysts [15]