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Cloud computing has made it easier and more costeffectivefor companies to store data online. Businesses no longer have to invest in physical servers and storage space to operate smoothly.

Many techgianthave rolled out cloud platforms over the years, and other companies specialize inkeeping those platforms protected. Many cloud computing stocks have delivered exceptional returns over the years, as scalability allows margins to expand rapidly onceitbecomes profitable.

Cloud computing has been hot for several years, but artificial intelligence is adding more fuel to the fire. Artificial intelligence requires significant computing power and data storage capabilities.Cloud platforms helptoenable many AI tools andgive corporations the opportunityto use this innovative technology.

Artificial intelligence is part ofthe reason thatthe cloud computing marketis projectedto maintain acompounded annual growth rate of 16.40% through 2029. These cloud computing stocksare positionedto benefit immensely from AI tailwinds.

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Amazon(NASDAQ:AMZN) is thelargest cloud computing providerin the industry. Amazon Web Services has almost one-third of the market. The company is alsoworking on a ChatGPT alternativeto expand its reach in the AI market.

The tech giantsoverallsales increased by 13% year-over-year to reach $143.3 billion in thefirst quarter. Those sales include Amazons online marketplacewhichhas helped the company expand into numerous industries. Amazon Web Services notably grewat a faster rate 17% year-over-year to reach $25.0 billion.

Amazon stock has been on a tear. Its upby29% year-to-date and has roughly doubled over the past five years. The stock is approaching a $2 trillion market cap and has a 54 P/E ratio. Amazon has several segments that stretch beyond cloud computing. It also offers exposure to groceries, advertising, streaming, gaming and other verticals. Amazonis currently ratedas a Strong Buy with aprojected 18% upsidefrom current levels.

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ServiceNow(NYSE:NOW) has delivered a 167% gain over the past five years for patient investors.While those returns arequitegood, Wall Street analysts believethat the stock can march higher.The cloud computing companyis currently ratedas aStrong Buy. The average price target indicatesthat thecompany can gain an additional 15% from current levels.

Most of the companys revenue is recurring, which offers a good baseline for rising revenue. ServiceNow exceeded guidance in thefirst quarterby reporting $2.6 billion in revenue. Thats a 24% year-over-year increase. More than $2.5 billion of the companys Q1 revenue was recurring.

ServiceNow enables digital workflows and helps companies become more efficient. Customers have been flocking to the Now Platform and theyre also paying a lot of money.

The company closed eight new transactions with annual contract values above $8 million in the first quarter. It hasmore than 8,100 customersand a 98% renewal rate. Almost 2,000 of the firms customers have annual contract valuesthat aregreater than $1 million.

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Alphabet(NASDAQ:GOOG, NASDAQ:GOOGL) is the third largest cloud platform and has been growingat a faster pacethan Amazon. While AWS reported 17% year-over-year revenue growth, Google Clouds revenue increased by 28.4% year-over-year to reach $9.57 billion.

Thats not the only highlight fromAlphabets first quarter results. Overall revenue increased by 15% year-over-year while net income surged by 57% year-over-year.

Net income growth is a big highlight,since it prompted the tech conglomerate to offer its first quarterly dividend of $0.20 per share. Alphabet reported a 29.4% net profit margin to close out the quarter, and ifcost cuttingmeasures continue, the firm canend up withelevated gains in the future.

Alphabet still trades at a reasonable 28 P/E ratio.Its theonline advertising leader and also one of the leaders incloud computing and artificial intelligence.Wall Street analysts believethat Alphabetshares cangain an additional 9%from current levels.

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Oracle(NYSE:ORCL) offers hardware and software products, but its software segment has been the main growth driver. Cloud services and license supportmade up72% of the firms revenue in thefourth quarter of fiscal 2024.This segment increased by 9%year-over-yearwhile Oracles other segments reported slightyear-over-yeardeclines.

Cloud computing is the defining element of Oracles investment thesis.Q4 cloud revenue IaaS and SaaS increased by 20% year-over-year to reach $5.3 billion. Overallrevenue only inched up by 3% year-over-year to reach $14.3 billion.

Artificial intelligence tailwinds should help Oracles cloud platform generatea higher percentage oftotal revenue. This development should result in growth acceleration since the lagging segments wont have as much of an impact.

Oracle shares are up by 36% year-to-date and have gained 138% over the past five years. The stock trades at a 38 P/E ratio and offers a 1.13% yield.

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Microsoft(NASDAQ:MSFT) hasbeen winningWall Street analysts for many years. The stock is currently rated as aStrong Buyand has a projected 11% upside. Long-term momentum has played a role in bullishness. Shares are up by 21% year-to-date and have gained 226% over the past five years.

The tech conglomerate offers exposure to many industries: artificial intelligence, advertising, gaming, business software, social media and others. However, none of those segments are asimportantas Microsoft Cloud.

The companys cloud platform generated $35.1 billion inQ3 FY24revenue, which is a 23% improvement compared to the same quarter last year. Microsoft also reported 17% year-over-year revenue growth across the board and grew its net income by 20%year-over-year.

Microsoft Copilot allows the company to expand into numerous industries and presents a compelling long-term opportunity. Copilot is slowlybeing integratedacross Microsofts software products like LinkedIn and other places.

Copilotalso has a cybersecurity division thatshould increase Microsofts presence in that vertical.Artificial intelligence and cloud computing both present long-term growth opportunities for Microsoft.

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Crowdstrike(NASDAQ:CRWD) makes cloud computing safer with its Falcon Platform. Businesses can detect and address threats before they getseriousand fortify their digital defenses.

Cloud platforms make it easier to store data and access digital files. While this is a boon for many businesses, putting everything on the webalsomakes it a target for hackers.

Cybercriminals attempt to infiltrate databases and access sensitive information about customers, people within the company and corporate assets

As such, the cybersecurity firm generates plenty of revenue.Q1 FY25 revenuecame in at $921.0 million,whichis a33% year-over-year increase.Crowdstrikes $3.65 billioninannual recurring revenue should support additional growth in the upcoming quarters. Net incomecame in at$42.8 million compared to a $0.5 million profit in the same quarter last year.

The stock has comfortably outperformed the market. Crowdstrike shares are up by 55% year-to-date and have gained 470% over the past five years.

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IBM(NYSE:IBM) has been reinventing itself for several years. Aftera lot ofhard work, the company now finds itself in the center of cloud computing and artificial intelligence.

Unlike most cloud computing stocks, IBM still has a reasonable valuation. Shares trade at a 19.6 P/E ratio and offer a 3.85% yield. The stock has gained 28% over the past year.

Wall Street analysts have rated the stock as aModerate Buyand are projecting a 6% upside from current levels. The highest price target of $215 per share suggests that IBM can gain an additional 24%.

IBM reported 1%year-over-yearrevenue growth and 69%year-over-year net income growthin thefirst quarter.Rising profit margins make the stock look more attractive, and the firm is alsoin the process ofacquiringHashiCorp (NASDAQ:HCP) for $6.4 billion. This acquisition will expand IBMs hybrid cloud market share and position it to benefit more from AI tailwinds.

On thisdate of publication, Marc Guberti held long positions in AMZN, NOW, GOOG, MSFT and CRWD. The opinions expressed in this article are those of the writer, subject to theInvestorPlace.comPublishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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7 Compelling Cloud Stocks to Buy as the AI Boom Rages On - InvestorPlace