Hyperscaler Rally: 4 Stocks to Buy Before It's Too Late

The big three cloud providers, Amazon, Microsoft, and Alphabet, are all seeing huge growth.

Meta Platforms is seeing rapid growth, while its stock remains cheap.

After being stuck in the mud as investors worried about capital expenditures (capex), hyperscaler stocks (companies that own large data centers) are finally starting to rally. Let's look at four to buy now while their valuations are still reasonable.

Amazon (NASDAQ: AMZN) stock has been on fire ever since the company reported strong Q2 results in late July. The company's cloud computing unit, AWS, is seeing accelerating growth, and its custom chip business is gaining strong traction.

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AWS Q2 revenue surged 37% to $42.2 billion, while its operating income soared 63% to $16.6 billion. Meanwhile, the company said its chip and AI businesses have both reached $25 billion revenue run rates.

The company's e-commerce business also continues to hum along, with solid revenue growth and nice operating leverage. The efficiency gains the company has seen in this business are often overlooked, but Amazon is using AI to reduce costs and shorten delivery times. It is also the world's leading manufacturer and operator of robots.

The stock remains attractively valued for now, trading at a forward P/E of 24 times, making it a great stock to buy even after its recent rally.