IaaS (Infrastructure-as-a-service, aka processors like CPUs/GPUs, storage units like SSDs or hard drives, and networking bandwidth for rent) Here’s my plain language definition of these three layers: These fundamentals are important for analyzing the potential of any cloud platform. Please do your own research before making any investment decisions.) Gross Margins: IaaS vs PaaS vs SaaSīefore I name specific companies and discuss why they are either good bets or bad bets, it is important to first lay out the architectural differences between the three layers of a cloud (IaaS, PaaS, SaaS), their respective gross margins, and the business logic that connects these layers. (The standard “this is not investment advice” disclaimer applies to this post and all Interconnected posts. As news like the US government banning Nvidia from selling its cloud data center chips to China continues to complicate the future, how should one invest in the “walled garden” that is China’s cloud? With this observation in mind and as an investor, I could not help but think about how to “place bets” on China’s cloud. The one-sentence answer to the rather broad, complex question of “how is China’s cloud industry doing?” is: China’s cloud transformation is still in its infancy and starting to permeate industries beyond the Internet tech sector. We combed through the official whitepaper published by the government-affiliated think tank, China Academy of Information and Communications Technology (CAICT), and combined our own domain knowledge. CNBC's Evelyn Cheng contributed to this report.A couple of weeks ago, we published a detailed breakdown of China’s cloud industry’s current state of development, which resonated with many industry analysts and technologists. "While there has been some recent news around intensified pricing competition in the market, we believe that is a stand-alone case and are confident about our coverage companies' 2021E (earnings) guidance as well as the industry landscape going forward," the analysts, led by Tina Hou, wrote. On average, the Goldman analysts forecast its three stock picks would see revenue growth of 38% year-over-year on average for 2021. ![]() Goldman is buy-rated on the stock and put its potential upside at 70.8%. The analysts also like the stock for its deal with Alibaba that it said would speed up estimated revenue growth from 1.6% on average between 20 to 24% between 20. Microsoft cloud operator 21Vianet is set to grow its data center business by 66% year-over-year in 2021, according to Goldman. Chindata will announce results on May 20. The analysts said Chindata is likely to expand: "We believe its dual competitive advantages – cost-effective build-out and strategic land bank reserves – pave the way for the company to potentially penetrate into a broader customer base." Goldman has a buy rating on the stock and estimated its upside potential is 55.5%. The data center operator has been the major data center partner for ByteDance since 2015, Goldman highlighted. Chindata had its initial public offering on the Nasdaq in October, raising $540 million with shares priced at the top end of their targeted range. GDS will report first-quarter earnings on May 19. Goldman estimated a potential upside of 66.5% for the stock. The firm debuted on the Nasdaq in 2016 and added a secondary listing in Hong Kong in November. Goldman estimated its revenue for 2021 would rise 38% year-over-year, the strongest among its peers. Goldman's buy-rated picks, all due to report earnings in the coming weeks, are: GDS, a data center giant that hosts the likes of Tencent Cloud and Alibaba's AliCloud, expanded from mainland China to Hong Kong in February. ![]() But these web giants - TikTok-owner ByteDance, Alibaba, Microsoft and the like - rely on data centers to host their vast cloud computing operations, and Goldman has identified three stocks in the space with big potential. ![]() Internet companies reaped the benefits Douyin, the Chinese version of short-video sharing app TikTok, for instance, hit 600 million daily active users. China's online population surged during the pandemic and by the end of last year it had nearly 1 billion web users. Personal Loans for 670 Credit Score or LowerĪnalysts at Goldman Sachs have picked three Chinese cloud stocks set for strong growth, with potential upsides to their share prices of more than 50%. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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