Technology

2 ETFs to Consider as Internet Giant Invests $1 Billion in Cloud Computing

Recent weakness in tech stocks doesn’t stop the world’s biggest players in the space from investing in cloud computing. Chinese Internet giant Alibaba is preparing to pump $1 billion to boost its cloud computing technology.

“Alibaba has said it will invest $1 billion over the next three fiscal years to support cloud computing customers, as the Chinese e-commerce giant looks to reignite growth after a historic slowdown,” a CNBC report said, noting that Alibaba is the third largest cloud. A computing player alongside other big tech names in the US like Microsoft and Amazon.

This could open a path towards investing in cloud computing companies headquartered in China, which is an added advantage of Global X MSCI China Information Technology ETF (CHIK). CHIK attempts to reflect the performance of the MSCI China Index’s large and mid-cap sectors ranked in the IT sector according to the Global Industry Ranking System.

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CHIK provides investors with:

  • Target exposure: CHIK is a targeted play on China’s IT sector – the world’s second largest economy by GDP.
  • ETF Efficiency: In a single transaction, CHIK provides access to dozens of IT companies within the MSCI China Index, providing investors with an effective way to express a sectoral view of China.
  • All Stocks Shown: The index includes all eligible securities under MSCI’s World Investment Market Index methodology, including China A, B, and H stocks, red chips, P chips, and foreign listings, among others.

ETF Option for Cloud Computing Growth

Additionally, ETF investors have an opportunity to capture the growth potential of cloud computing usingGlobal X Cloud Computing ETF (CLOU). In an effort to track the Indxx Global Cloud Computing Index, the fund owns a basket of companies likely to benefit from the continued spread of cloud computing technology and services.

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The cloud computing industry refers to companies that (i) license and offer software online on a subscription basis (SaaS), (ii) provide a platform to create software applications delivered via the Internet (PaaS), and (iii) provide virtual computing infrastructure over the Internet (IaaS). ), (iv) own and manage facilities that customers use to store data and servers, including data center real estate investment trusts (REITs), and/or (v) manufacture or distribute infrastructure and/or hardware components used in cloud and edge computing activities .

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CLOU grants investors:

  • High growth potential: The global cloud services market increased by 11% from 2019 to 2020, exceeding $270 billion. Projections indicate that the market could reach nearly $400 billion by 2022.
  • Structural tailwind: Demand for cloud computing services has surged during the pandemic and seems unlikely to abate, as work, school, and social activities increasingly move to digital experiences.
  • Unconstrained approach: Cloud computing spans multiple sectors, and its most innovative companies include both household names and new entrants from around the world. CLOU invests accordingly, regardless of sector or geography.

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