Every few years, if less, investors find a new tech story to love. The past few years has seen interest shift to artificial intelligence, following an interest in the growth of electric vehicles, as well as blockchain and cryptocurrency technology.
One trend is a bit older, having been around for nearly 10 years. And as a more mature trend, it’s leading to big cash flows and profits for companies embracing it now.
That trend is the cloud. Cloud services have grown tremendously in the past decade, allowing a number of big tech companies to grow even larger.
This earnings season, the winner of the cloud services goes to Amazon (AMZN). Shares jumped 8 percent last Friday as the company handily beat earnings, driven in a large part by their cloud services.
That could also be a sign that big-cap tech stocks may have run far this year, but could still go higher after the market is done selling off from the credit downgrade news that shook stocks last week.
Action to take: Shares are close to their 52-week highs, but still have room to trend higher by the end of the year. Investors may want to buy a share or two now, and use any pullback in Amazon to add to that stake.
For traders, the November $155 calls, last going for about $5.15, could see mid-to-high double-digit gains in the months ahead.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.