The cloud is back. Long live the cloud.
During the dark days of October we saw a level of fear that caused sheer panic in a multitude of sectors. The worst hit? The cloud. We heard myriad calls that the cloud stocks, long the darlings of this market, were rolling over and the momentum hedge funds were throwing these stocks out as fast as they can.
But you know was at odds with that selling?
Last night we got some reports from companies that are integral to the cloud and they showed anything but a slowdown. For example, New Relic (NEWR) , run by Lew Cirne, one of our absolute favorite CEOs, told a story of accelerated growth of the use of the web and how important his celebrity dashboard is to the maintenance of important real time websites like last night's USA Today digital coverage of the election.
The stock's soaring.
Then there's the extraordinary numbers put up by Tableau Software (DATA) which does analytics for web users. Adam Selipsky, the CEO brought in to turn the company around, has just put up extraordinary numbers, including total annual recurring revenue of $762 million, up 45% for the year.
Then there's Twilio (TWLO) . We recently visited Twilio 's headquarters where the brilliant Jeff Lawson shows us how clients use push technology in the cloud to create an amazing customer experience. You may not know Tableau but if you have ever ordered an Uber or a Lyft you are using their cloud communication technology. Twilio is rapidly developing the signal, easiest way to stay in touch with customers. I say easiest because Jeff actually taught me how to write code to create a template that I am thinking I might use for the Longshoreman, our new Tuscan restaurant where we can push specials right to your cellphone. It's so easy that I know I can do it and you can, too.
These are all software companies integral to the cloud and their businesses are all accelerating.
Who else is winning? Last night in an extraordinary interview with Eric Jhonsa of TheStreet.com, Lisa Su, the all-star CEO of (AMD) , talked about how Amazon (AMZN) just selected their chips for their data centers. What's incredible to me is the demand Amazon Web Services has. The business is growing like crazy. Again, that's totally at odds with what we worried about when the company reported last month.
Now let's put it altogether. Today, I met with my friend Marc Chaikin from Chaikin Analytics, and the man who created the Chaikin Money Flow which we talk about all of the time in our Off the Charts segment. We did a webinar together and he mentioned that the tick, an instrument developed by the late, great Dick Arms, which measures buying and selling pressure during trading sessions, showed the highest level of concentrated selling in 40 years. That was pure panic, Chaikin told us. And the cloud was at the epicenter of the panic. He said it was momentum funds bailing and once they were done bailing you got your opportunity. That opportunity continues now that we have the evidence we need that the move to the cloud continues to accelerate. The sellers may have initially been right as the stocks fell precipitously but today they rallied and both Marc and I agree they aren't done. If anything they might be the best tech stocks to own going from now until the end of the year.