The size of the global cloud computing market is expected to roughly double from 2023 to 2028, reaching nearly $1.3 trillion by the end of that five-year period. Demand for cloud computing continues to surge, and the companies that make this technology possible—data centers, platform operators, and others catering to cloud infrastructure needs—stand to be primary recipients of the increase in spending on all things cloud.

Though the cloud industry is increasingly well-established, there is still some jostling for position among cloud infrastructure firms. Further, new technological developments and expansion into burgeoning markets mean that there is space for some of these companies to capture additional market share.

From an investor's perspective, it may be difficult to determine which cloud infrastructure plays are most likely to be winners. Here, we examine three companies with varying levels of name recognition within the cloud space to see how each might appeal to investors interested in exposure to this fast-growing market.

Wall Street Bullish Despite Mixed Results, Cloud Spin-Off Rumors Swirl

With a market capitalization of $1.2 billion, Applied Digital Corp. (NASDAQ: APLD) is among the larger providers of data centers and artificial intelligence cloud services currently representing the industry. The company enjoys unanimous support among Wall Street analysts, with nine reviewers assigning it a Buy rating and a consensus price target just over double the current price.

Applied Digital focuses on data centers for hyperscalers, major tech firms like Amazon.com Inc. (NASDAQ: AMZN) and Meta Platforms Inc. (NASDAQ: META), with tens of billions of dollars to spend on building up infrastructure for their cloud and AI projects.

APLD has had mixed stock performance over multiple time periods, including gains of about 68% in the last year and a decline of roughly a third year-to-date (YTD). Part of this may be due to a lack of alignment between what investors see as a strongly promising industry—in which Applied Digital has taken an early lead after its 2022 pivot away from cryptocurrency mining—and its results.

In the latest quarter, Applied Digital missed analyst expectations on revenue, despite posting a year-over-year (YOY) increase of more than 22%. However, its net loss per share was two cents better than expected. The report threw Applied Digital's future into question, though, as the company's executives speculated about selling off its fast-growing cloud services business and potentially transitioning into a REIT.

Couchbase Narrows Losses and Grows Revenue, Eyes Edge Computing for Future Growth

Couchbase Inc. (NASDAQ: BASE) is distinct from Applied Digital's business model in that it supplies database-as-a-service products for enterprise applications. This allows customers to deploy and manage Couchbase Server across different cloud settings.

Couchbase's fiscal 2025, which ended Jan. 31 of this year, saw a fairly solid 16% YOY revenue improvement. It also saw annual recurring revenue growth of 17% for the same period—this latter figure may point to the sustainability of Couchbase's relationships with individual customers over time.

Losses remain a factor, although Couchbase narrowed its losses from operations in the most recent quarter compared to the prior-year period.

The company has struggled with cash flow, which declined YOY on both an annual and a quarterly basis as reported in February. On the other hand, analysts may be optimistic about Couchbase's recently launched Edge server, designed to be used offline for low-latency data access and processing.

Expansion into new areas such as this could be key to Couchbase's continuing to carve a niche for itself in a competitive industry.

Operational Losses and Revenue Retention Are Issues for Fastly

Another service provider in the edge cloud platform space, Fastly Inc. (NYSE: FSLY), generates a substantial portion of its revenue from content delivery and security services.

While this provides it with an operational focus, it also positions the company to compete with larger, better-established providers. Fastly tends to cater to larger customers, although it has faced trouble with dwindling revenue from these clients.

Negative operating income also plagues Fastly, meaning that the firm has that much more of an uphill battle before it can achieve sustainable profitability.

This is enough to give analysts pause, as all nine ratings for Fastly are Hold, and the stock is down about 37% YTD.

In the battle of cloud infrastructure firms, investors may have more success with another company, although the price drop has given the company a relatively attractive P/S ratio of 1.6.

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