Cloud Computing: The Tech Sector’s Best Kept Secret – InvestorPlace

Artificial intelligence (AI), 5G and coronavirus stocks have been on many investors minds recently. While there are certainly many opportunities in those sectors, theres another tech sector thats seen massive growth over the past year: cloud computing.

Source: Blackboard / Shutterstock

It doesnt sound nearly as sexy, but outside of coronavirus themes, its actually been the best performing sector year-to-date. After all, many businesses are now operating remotely, and all that data has to be storedsomewhere. As a result, the big cloud computing ETFs WisdomTree Cloud Computing (NASDAQ:WCLD), First Trust Cloud Computing (NASDAQ:SKYY) and Global X Cloud Computing (NASDAQ:CLOU) have significantly outperformed the SPDR S&P 500(SPY). The SPY is still down over 6% while WCLD, SKYY and CLOU are up 53%, 22% and 35%, respectively.

While cloud computing isnt nearly as flashy, its key to the future of technology. Cloud computing allows organizations to share data and store information online. In other words, they can move away from the bulky and limited physical storage of data, to the virtually unlimited storage of data through the cloud systems. They also make it easier to share information with, say, clients or colleagues in a different physical location.

Case in point:Veeva Systems (NYSE:VEEV), a leading provider of cloud software solutions for the life sciences industry. Its solutions help pharmaceutical and life sciences companies use cloud-based architectures and mobile applications for their businesses.

Now, the company actually has a very interesting origin story. Veeva Systems was founded in 2007 by Peter Gassner and Matt Wallach, who had never met before. In fact, they lived 3,000 miles away from one another. However, they both saw the direction cloud computing was heading and how it could benefit the life sciences industry.

Given Peter Gassners experience in Silicon Valley and Matt Wallachs experience in life sciences, they were the perfect duo to bring the cloud and life sciences together. The company was launched right before the iPhone hit the streets, so there was plenty of opportunity for VEEV to use cloud computing to take the life sciences industry by storm, developing technology solutions specifically to meet its customers needs.

Today, VEEV offers a variety of cloud computing solutions that fall under the Veeva Commercial Cloud, a suite of multichannel customer relationship management (CRM) applications, and Veeva Vault, a cloud-based enterprise content management application for managing commercial functions. The company has a number of well-known clients, includingAstraZeneca(NYSE:AZN), Teva Pharmaceuticals (NYSE:TEVA) and Bayer.

Over the years, strong global demand has added nicely to the Veeva Systems top and bottom lines.VEEV announced in May that it exceeded its own expectations for its first quarter in fiscal year 2021.

First-quarter revenue grew 38% year-over-year to $337.1 million, up from $244.8 million in the first quarter of 2020. Subscription revenue accounted for $270.2 million. First-quarter earnings increased 34% year-over-year to $105.2 million, while earnings per share jumped 32% year-over-year to $0.66. The consensus estimate called for earnings of $0.58 per share on $319.99 million in revenue, so Veeva Systems posted a 13.8% earnings surprise and a 5.3% revenue surprise.

The company continues to support the life sciences industry throughout the coronavirus pandemic, so healthcare professionals can carry out critical work for patients wellbeing.

Remote meetings between pharmaceutical companies and doctors through Veeva Engage are up more than 30 times during the pandemic. Doctors are also finding digital meetings more effective and plan to continue to a mix of in-person and digital interactions once these outbreaks subside. So, this should be a nice tailwind for the company.

What I also like about VEEV is its scalability: the ability of a business to exponentially grow revenues while only growing costs minimally. Cloud computing is very scalable and flexible because the upfront production costs are minimal. This makes companies like VEEV invaluable to the technology sector and its future.

So, its no surprise VEEV hit a new 52-week high of $244.10 this week. And since its also a holding in WCLD and SKYY, as well as 102 other U.S. ETFs, the stock should continue to see nice boosts in buying pressure.

Speaking of new highs,several of my stocks across my growth services, likeAdobe Systems (NASDAQ:ADBE), DocuSign, Inc. (NASDAQ:DOCU), Microsoft (NASDAQ:MSFT), Zoom Video Communications(NASDAQ:ZM) and Digital Turbine, Inc.(NASDAQ:APPS) also hit 52-week highs this week. What is especially noteworthy is that DOCUs new 52-week high came on Wednesday, during the big broad market selloff!

This is the type of performance you can expect when you invest in the best of the best. These are all fundamentally superior stocks with healthy sales and earnings growth that should keep them moving higher regardless of where the market turns next.

As aPlatinum Growth Clubmember, you have access to all of my buy lists, including theexclusive Model Portfolio, which offers the crme de la crme of stocks. If youre interested,you can click here to try myPlatinum Growth Cluband see all my latest buy and sell recommendations.

This includes myGrowth Investor July Monthly Issue, which just posted. In it, I released four new stock recommendations in hot sectors, and I cut three others from the team as well. You can learn all about it here.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the Master Key to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

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Cloud Computing: The Tech Sector's Best Kept Secret - InvestorPlace