Cloud computing has changed how businesses store data and make decisions. This technology enables higher productivity for corporations, small businesses and individuals. It’s also a lot more affordable to use cloud computing than it is to have physical servers. The rapid growth of the industry has resulted in many top-performing stocks that exceeded market returns. The great thing about cloud computing from an investing perspective is that the technology often becomes the backbone for its customers. That’s why many cloud computing companies have renewal rates that exceed 90%. Once a company uses cloud computing solutions, those monthly costs become a fixture in that company’s budget. These are some of the cloud computing kings that are dominating the digital sky and rewarding long-term investors. The Trade Desk (TTD) The Trade Desk (NASDAQ: [TTD](https://investorplace.com/stock-quotes/ttd-stock-quote/)) is a rapidly growing programmatic advertising company that uses a cloud-based platform to assist businesses with ad placements. The company helps corporations run more profitable ad campaigns and is gaining market share in a space that has normally been reserved for Alphabet and Meta Platforms (NASDAQ: [META](https://investorplace.com/stock-quotes/meta-stock-quote/)). The Trade Desk may be smaller than those two companies, but its stock has comfortably outperformed both big tech companies over the past five years. Shares have gained 67% year-to-date and are up by 543% within five years. Shares are still removed from their all-time high in November 2021 when the stock briefly exceeded $100/share. Revenue growth continues to be a strong point for the company. In the third quarter, the company [increased revenue by 25% year-over-year](https://investors.thetradedesk.com/news-events/news-details/2023/The-Trade-Desk-Reports-Third-Quarter-2023-Financial-Results/default.aspx). It’s an acceleration from the 23% year-over-year increase from the nine months ended Sep. 30. Customer retention once again exceeded 95% which has been the norm for the past nine years. Net income more than doubled year-over-year and reached $39 million in the third quarter. Monday (MNDY) Monday (NASDAQ: [MNDY](https://investorplace.com/stock-quotes/mndy-stock-quote/)) is a cloud-based project management system that helps companies stay on top of key tasks. The company has applications and features that aid in work management, sales customer relations management, and product development. 180,000+ customers use Monday including more than [2,000 customers who pay over $50,000/yr for the software](https://s29.q4cdn.com/881027206/files/doc_financials/2023/q3/3Q23-_-Shareholder-Letter.pdf). This customer base grew by 57% year-over-year and helped the company achieve 38% year-over-year revenue growth. High retention rates suggest the good times will keep on rolling. It’s been a good year for shareholders as the stock is up by 59% year-to-date. Shares have been roughly flat since their IPO but Monday had the unfortunate timing of going public in June 2021. [Tech stocks](https://investorplace.com/industries/technology/) like Monday crashed in 2022 before rebounding in 2023. Shares [briefly traded over $400/share](https://www.macrotrends.net/stocks/charts/MNDY/monday/stock-price-history) which means the stock has to more than double to reclaim its all-time high. The company only has a $9 billion market cap and recently reported a profitable quarter. ServiceNow (NOW) ServiceNow (NYSE: [NOW](https://investorplace.com/stock-quotes/now-stock-quote/)) is a cloud computing company that offers information technology workflows, data protection, and other services for businesses. The company serves approximately 7,700 global enterprise customers that combine for a 98% renewal rate. Many of these customers allocate large budgets for ServiceNow’s products, and the cloud computing company is experiencing growth among its seven-figure deals. The company [closed 83 new deals](https://www.servicenow.com/content/dam/servicenow-assets/public/en-us/doc-type/other-document/servicenow-fact-sheet.pdf) in the third quarter each exceeding $1 million in annual revenue. The company has 1,789 customers who pay over $1 million per year and 49 customers who pay over $20 million per year. The renewals and new deals helped the company [grow revenue by 25% year-over-year](https://www.servicenow.com/company/media/press-room/servicenow-third-quarter-2023-financial-results.html) while raising 2023 subscription revenues and operating margin guidance. The company’s financial strength has translated into outperformance. Shares are up by 82% year-to-date and have soared by 290% over the past five years. The company is a larger player in the cloud computing space with a $140 billion market cap but it is not the largest. Profit expansion will make the valuation easier to justify in the future. Microsoft (MSFT) Microsoft (NASDAQ: [MSFT](https://investorplace.com/stock-quotes/msft-stock-quote/)) is close to having the highest market cap in the stock market and is only behind Apple (NASDAQ: [AAPL](https://investorplace.com/stock-quotes/aapl-stock-quote/)) in that regard. The company’s historical outperformance stems from the leadership’s ability to capitalize on innovative technology like cloud computing and make acquisitions to fill in any gaps. Shares are up by 56% year-to-date and have gained 272% over the past five years. The stock offers a 0.80% dividend yield but that isn’t the company’s strength. Microsoft’s versatility and high profit margins along with top and bottom-line growth make it a popular pick for many funds. Microsoft Azure is a leading cloud computing application that helps businesses store data, become more efficient, and minimize the risk of cyber attacks. Azure helped Microsoft’s “server products and cloud services” revenue increase by 21% year-over-year in the [third quarter](https://www.microsoft.com/en-us/investor/earnings/fy-2024-q1/press-release-webcast). Microsoft as a whole grew revenue by 13% year-over-year while net income jumped by 27% year-over-year. The company is also a frontrunner in the artificial intelligence industry with OpenAI and its bundle of Microsoft Office products. Microsoft CEO Satya Nadella mentioned the company’s AI-powered assistant known as Copilot is gaining momentum and will become a part of more Microsoft products. Datadog (DDOG) Datadog (NASDAQ: [DDOG](https://investorplace.com/stock-quotes/ddog-stock-quote/)) helps businesses monitor their cloud applications and enhance their online security. The company continues to innovate its software to increase retention. For instance, the company made several additions designed to [help DevOps and security teams address issues quickly](https://investors.datadoghq.com/news-releases/news-release-details/datadog-adds-identity-vulnerability-and-app-level-findings). Time is of the essence during a cyber attack, and a quicker response can mitigate the damage and potentially save millions of dollars. The company makes it easy to patrol your digital assets from one central hub and can detect suspicious activity. Datadog has been very rewarding for shareholders as the stock has gained 70% year-to-date. DDOG is up by 240% over the past five years. Datadog has given investors several reasons to be excited in recent quarters. The company became profitable and is rapidly expanding its margins. In the [third quarter](https://investors.datadoghq.com/static-files/27c898b8-fb12-48b8-af68-5958f226a2fc), Datadog posted $22 million in unaudited net income and grew revenue by 25% year-over-year. The company has a reliable foundation of 3,130 customers that generate over $100,000 in annual recurring revenue for the company. Datadog also has a [healthy balance sheet](https://investors.datadoghq.com/static-files/0b16f121-198b-46c7-8920-5707c84f0769) to support continued growth. Total current assets are at $2.8 billion while total current liabilities are $842 million. Alphabet (GOOG, GOOGL) Alphabet (NASDAQ: [GOOG](https://investorplace.com/stock-quotes/goog-stock-quote/), NASDAQ: [GOOGL](https://investorplace.com/stock-quotes/googl-stock-quote/)) got its start as a search engine. The company still makes the majority of its revenue from Google and YouTube advertising, but the conglomerate has expanded into other areas. Google Cloud is a high-growth segment that has paid off for Alphabet. Google Cloud helps businesses increase productivity and stay secure while lowering their costs. The company uses Generative AI to improve its product and offers [$300 in free credits on signup](https://cloud.google.com/) to entice business owners to get started. Google Cloud made up more than 10% of the company’s total revenue. It’s also growing at a fast pace and hit [$8.4 billion in revenue in the third quarter](https://www.abc.xyz/assets/4a/3e/3e08902c4a45b5cf530e267cf818/2023q3-alphabet-earnings-release.pdf). Google Cloud revenue grew by 22.5% year-over-year while the company’s overall revenue increased by 11% year-over-year. Google Cloud also become a profitable segment for the company in 2023. That segment generated $266 million in operating income in the third quarter compared to a $440 operating loss during the same time last year. Digital Ocean (DOCN) Digital Ocean (NYSE: [DOCN](https://investorplace.com/stock-quotes/docn-stock-quote/)) is a cloud computing company that serves small and medium-sized businesses. Most cloud computing companies focus on larger corporations which leaves an opportunity for Digital Ocean. The firm generates [$713 million in annual recurring revenue](https://investors.digitalocean.com/overview/default.aspx) and has 154,000 customers that spend more than $600 per year. It’s a smaller figure to lead with compared to companies like Datadog and ServiceNow. However, it further demonstrates Digital Ocean’s focus on smaller businesses. The strategy worked well this year as the stock is up by 50% year-to-date. The 5-year picture isn’t as impressive as shares are down by 8% during that time. The company recently reported profitable quarters including [$19 million in net income during the third quarter](https://investors.digitalocean.com/news/news-details/2023/DigitalOcean-Announces-Third-Quarter-2023-Financial-Results/default.aspx). Revenue growth came in at 16% year-over-year which is lower than previous quarters. Digital Ocean has enticing retention rates and is smaller than most of the other cloud computing companies. DOCN only has a $3 billion market cap and it looks like it can swing to the upside as profits expand. Investors should monitor revenue growth rates to see if they return to the 25%-35% levels from earlier in the year. On this date of publication, Marc Guberti held long positions in NOW and MSFT. The opinions expressed in this article are those of the writer, subject to the [InvestorPlace.com](https://investorplace.com/) [Publishing Guidelines.](https://investorplace.com/corporate/investorplace-publishing-guidelines/)
