The combined valuations of the Cloud Wars Top 10 companies rose more than $100 billion in the past month, revealing ongoing confidence in the world’s largest and most-influential cloud vendors as drivers of digital innovation and positive business outcomes.
As you’ll see in the chart below, Microsoft’s market cap is up 7.3% from Jan. 20 to Feb. 20, and with a market cap hovering near $2 trillion as is the case with Microsoft, a jump of that magnitude resonates powerfully — in this case, to the tune of an increase of $130 billion.
When I introduced the Cloud Wars Top 10 Confidence Index last month in a piece called Cloud Confidence Index Remains Strong, Even after Layoff-Mageddon, I offered this quick rationale for why I’ve created this monthly comparison:
As we enter this new phase, I’ve decided to do a little morphing myself by transforming my long-running occasional series called “Market Cap Madness” to “Cloud Confidence Index.” The metrics I’ll offer will be similar, but I’m trying to evolve it to represent more of an outside-in view to reflect the stunning changes I’ve outlined above.
As I’ve said before, these pieces have nothing to do with stock picking or investment advice — rather, they’re simply an analysis of how the public’s behavior can be viewed as a very specific measure of its confidence in the growth potential of the cloud industry.
So each month around this time, we’ll take a look at how the public is viewing the world’s 10 largest and most-influential cloud providers in the context of their ability to continue being seen as indispensable enablers for the highly disruptive world of digital business.
In addition to the Microsoft bump between Jan. 20 and Feb. 20, here are a couple of other significant moves in this latest iteration of the Cloud Confidence Index:
Salesforce saw its market cap jump 9.3% over the past 30 days, and I suspect that’s due to the dramatically heightened involvement of activist investors looking to drive significant changes within Marc Benioff’s company after a disturbing fiscal Q3 set of numbers a few months ago. Salesforce will release FY23 Q4 numbers next week on March 1, and the number I’ll be watching for most closely is revenue growth. Because last quarter, that growth rate fell to 14% after more than 5 years of being at 20% or higher, typically in the mid or high 20s. That quarterly earnings announcement also included the departures of co-CEO Bret Taylor and Slack CEO Stewart Butterfield, along with Salesforce’s stunning decision that it either would not or could not offer future revenue guidance. So, it’s rather remarkable that, in the wake of its jarring disclosures three months ago, public confidence in Salesforce seems to be on the rise — and the only reason I can conjure up for that is some sense of optimism that those activist investors will be badgering Benioff to hack away at costs and find some way to restore higher levels of growth.
Workday’s market cap jumped 7.7% in the past 30 days, likely on the expectation that it will report solid growth when it releases its fiscal Q4 numbers on Feb. 27. I’m expecting Workday to report subscription-revenue growth of at least 20% for the quarter as it continues to penetrate the world’s largest companies, as well as midsized corporations, with its Financials and HCM portfolio.
Snowflake’s market cap rose $6.7% in the past month, probably due to expectations that it will continue to show exceptional growth when it releases its fiscal Q4 numbers on March 1. The catalyst for the ongoing data-cloud revolution, Snowflake 3 months ago reported product-revenue growth of 67% to $523 million, and I’m expecting it to post product-revenue growth of about 56% for the quarter that ended Jan. 31.
Here’s the latest Cloud Wars Top 10 Confidence Index, and we’ll be back about this time in March with our next update.
| Company | Mkt Cap 2/20/23 | Mkt Cap 1/20/23 | Change |
|---|---|---|---|
| #1 Microsoft |
$1.92 trillion |
$1.79 trillion |
+7.3% |
| #2 Amazon |
$996 billion |
$991 billion |
+0.5% |
| #3 Google | $1.21 trillion | $1.27 trillion |
-0.5% |
| #4 Oracle |
$235.3 billion |
$235 billion |
— |
| #5 SAP |
$138.8 billion |
$139 billion |
— |
| #6 Salesforce |
$165.2 billion |
$151 billion |
+9.3% |
| #7 IBM |
$121 billion |
$126 billion |
-4% |
| #8 Workday |
$47.8 billion |
$44.4 billion |
+7.7% |
| #9 Snowflake |
$49.6 billion |
$46.5 billion |
+6.7% |
| #10 ServiceNow |
$89.1 billion |
$89 billion |
— |
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