Tech Stocks

This Tech Revolution Is Still in Its Infancy (But Growing Fast)

It’s so nebulous and vague. Most people have an idea of what it means, but they can’t really describe it.

It seems magical… mysterious.

It’s everywhere and nowhere, all at once.

It’s… “the cloud.”

Whether you realize it or not, you access the cloud every day – every time you use the Internet. And, not surprisingly, many of the best-performing stocks this past year are companies involved in this technology.

Specifically, those that focus on on-demand computing or converged infrastructure.

In layman’s terms, converged infrastructure refers to the use of programs that aren’t housed locally on your hard drive. Instead, your device uses the web to access necessary information.

You see, when you store data in the cloud, it’s actually being stored on a third-party site (a server). For businesses, this is both safer and cheaper. And, as a result, the global cloud-computing market has been on a tear since 2008.

Back then, it was worth a mere $5.6 billion.

As of 2014, the market had increased to $56.6 billion. That’s a 910.7% jump in just six years. And the growth is far from slowing…

According to the International Data Corporation (IDC), the cloud-computing market is expected to more than double by 2018, hitting $127.5 billion.

At that time, a whopping 62% of all customer relationship management software will be cloud-based. And with the proliferation of smartphones, tablets and a host of other mobile devices – as well as their increasing importance in day-to-day business operations – this traffic will explode.

By 2019, cloud applications will account for 90% of mobile data traffic.

We’re not talking about people leaving comments on Facebook (Nasdaq: FB), watching Netflix (Nasdaq: NFLX) or scrolling through pictures on Instagram.

We’re talking strictly about business traffic. Sales transactions, logistical information, communications… the amount of data that will float from mobile device to mobile device is mind-blowing.

In 2015, global mobile data traffic increased 74% to 3.7 exabytes per month.

That’s A LOT of data.

To be clear, 1 exabyte = 1 billion gigabytes, or 1 quintillion bytes. Put another way, it’s believed that a single exabyte could hold 500 to 3,000 times all the content in the Library of Congress.

We’re generating and transferring so much data now that mobile data traffic has grown 4,000-fold over the past decade. It’s thanks in large part to the introduction of Apple’s (Nasdaq: AAPL) iPhone and other smart devices.

Just think, in 2000, mobile networks carried 10 gigabytes per month.

By 2005, this had risen to 1 petabyte. (For scale, 1 exabyte = 1,000 petabytes.)

By 2020, monthly mobile data traffic will increase to 30.6 exabytes.

This area of technology has been one of the fastest-growing segments for the last several years… and there’s no doubt it will stay that way for years to come.

The trend is clear. Soon, mobile-connected devices will outnumber people on Earth. So it’s no surprise that big names like Amazon (Nasdaq: AMZN), Google – now Alphabet (Nasdaq: GOOG) – and Microsoft (Nasdaq: MSFT) have all staked a claim in this space.

The more mobile devices that populate the world, the greater the need for cloud-computing services.

We are at a tipping point for this industry. And the floodgates are opening.

Good investing,


*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.


Matthew’s expertise ranges from classic industries such as oil and mining to cutting-edge markets like small cap tech, cannabis, 3D printing and cloud computing. With almost two decades of financial experience under his belt, Matthew’s knack for finding market trends never fails to surprise us, which is why we keep a close eye on his free e-letter, Profit Trends.

Articles by
Related Articles