Profit From the Supply-Demand Imbalance in Cloud Computing
Cloud computing has driven the tech sector’s growth in the last five years. Analysts continue to forecast strong growth throughout the rest of this decade. According to GrandView Research, the global cloud computing market size was valued at $752.44 billion in 2024. That’s expected to climb to over $2.3 trillion by 2030, a compound annual growth rate (CAGR) of 20.4% between 2025 and 2030.
One reason for the strong growth in cloud computing is its pay-as-you-go model. However, that demand supports the need to invest in the companies building that infrastructure, which means data centers, artificial intelligence (AI) and machine learning.
That’s why NVIDIA Corp. (NASDAQ: NVDA) will continue to attract investor capital. However, if you’re looking for alternatives in this growing space, a number of companies provide ways to invest in cloud infrastructure literally from the ground up.
Demand May Not Be Fully Priced In
Prologis Inc. (NYSE: PLD) is a real estate investment trust (REIT) that, until recently, was not in the data center business. That’s changing, and so is the forecast for the stock.
Prologis has a solid portfolio of properties focused on warehouses and logistics. This provides stable occupancy rates, which should continue improving with consumer sentiment. But the need for data centers creates a need that several companies will need to fill. Not only that, but Prologis is also embracing sustainable energy and storage, which will be every bit as needed as the data centers themselves.
PLD stock is trading near the top of its 52-week range and within 5% of analysts’ consensus price target. However, the data center growth may not be fully priced into earnings estimates of 8% growth in the next 12 months, particularly for a stock that’s trading at around 19x forward earnings, a discount to its historical valuation.
Meeting Two Key Data Center Needs
Super Micro Computer Inc. (NASDAQ:SMCI) is one of the leading names in the AI infrastructure space. As of October 1, SMCI stock was up more than 72% in 2025. That’s pushed it well above its consensus price target, but it still looks like a strong choice for buy-and-hold investors.
That’s because Super Micro is meeting two key needs of data centers. First, all these NVIDIA GPUs need somewhere to go. Super Micro provides customizable servers and racks that can integrate NVIDIA’s chips, including its latest Blackwell chips.
Even as data centers are being built, investors are thinking about the next problem. That is, how to manage the 24/7 needs being driven by artificial intelligence. Super Micro is a leading provider of liquid cooling technology. This can reduce power costs up to 40% to improve data center efficiency.
Analysts project over 19% earnings growth for Super Micro in the next 12 months. However, the stock has a forward price-to-earnings (P/E) ratio of over 25x, which may mean the stock is fairly valued.
Arista Ensures That AI Stays Connected
Arista Networks Inc. (NYSE: ANET) handles the network connections that data centers will need to allow AI clusters to work together. The company’s 400G and 800G Ethernet solutions dominate this market and are supported by contracts from several major hyperscalers.
That demand shows up in the company’s earnings report. Arista is delivering strong year-over-year topline and bottom line growth. To put the opportunity in perspective, Arista is on track to deliver nearly $9 billion in revenue in 2025. However, it sees the total addressable market as being $70 billion by 2028.
The Future of Cloud Computing Infrastructure
Since reaching an ATH of over $151 in mid-September, ANET stock has shown signs of being overbought. Nevertheless, on two separate occasions since hitting the ATH, investors have tried to reclaim that price. Both times, they’ve been met with resistance.
Honestly, many investors are hoping for a pullback, which would be a screaming buying opportunity for a stock with a consensus price target of $162.
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