Wall Street's going crazy over a group of technology stocks called 'MAGS' - Here's why
"Investors who went long the shares of the four leading public cloud vendors Microsoft, Amazon, Google and Salesforce (the MAGS trade? alright, we know that it's not as cool as FANG) would be finishing 2015 in a very good mood," the note said.The four companies have a combined market cap of $1.3 trillion, while growing roughly 50% in share price on average over the past year.
Deutsche Bank added the chart below to illustrate MAGS' strong growth:
Amazon, meanwhile, continues to be the stock with by far the most upside potential, even on the enterprise side, largely due to AWS's massive growth. As MKM Partners wrote in a note Tuesday, "We consider the rise of AWS as the most consequential development in the IT sector in many decades."
Deutsche Bank also wrote that Google is the one company that could surprise with a strong push on the cloud side, which is still considered to be lagging behind AWS and Microsoft Azure, especially following the recent hire of former VMware CEO Diane Greene.Google's increased focus on the enterprise side could potentially lead to a Salesforce acquisition too, it noted, as it needs a stronger sales and support team in the space.
"The consensus Street view is that Google now needs to build a material enterprise sales and support presence and that it is likely to do so either by going on a sales hiring spree or by acquiring an established cloud vendor (Salesforce?) in 2016," it wrote.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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