Cloud Hosting

One structural story that still has many chapters left in it is the shift to the cloud.

The good news for investors is that there are a number of ways to gain exposure to it on the Australian share market.

Four ASX shares that look well-positioned to benefit from the cloud computing megatrend are listed below. Heres what you need to know about them:

Among this integrated property companys vast portfolio of assets are data centres. So this could make Goodman an option if youre looking for exposure to the cloud. To date, the company has developed over 400,000 sqm of space and procured 585 MW of dedicated power across multiple regional platforms for a range of hyperscale and co-location data centre partners. Citi currently has a buy rating and $21.00 price target on Goodmans shares.

Macquarie Telecom is a provider of telco and hosting services to corporate and government customers. It is the companys hosting business that is expected to be the key driver of growth for the company over the coming years. In fact, you only need to look at its half year results to see this. For the six months ended 31 December, Macquarie Telecom delivered a 15% increase in EBITDA to $36.4 million. This was driven largely by a 23% increase in hosting EBITDA to $27.3 million. Last month Canaccord Genuity put a buy rating and $68.00 price target on its shares.

Another way to gain exposure to the cloud is with Megaport. It offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. Megaport has networking equipment in hundreds of data centres around the world, which has created a software layer that provides an easy way for users to create and manage network connections. This means that through the Megaport network, users can create and run a global network with or without the need for physical infrastructure. Goldman Sachs currently has a buy rating and $15.55 price target on its shares.

Another company that has been benefiting greatly from the cloud computing boom is NextDC. Thanks to the ever-increasing amount of data being generated by consumers and businesses, demand for capacity in its data centres has been going through the roof. Positively, this week Goldman Sachs has been speaking to industry participants and found that demand remains very strong. In light of this, the broker has added its shares to its conviction buy list and lifted the price target on them to $15.00.

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

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*Returns as of February 15th 2021

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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4 fantastic ASX shares with exposure to the cloud computing boom - The Motley Fool Australia