The ever-evolving technology sector has been seeing a number of new trends over the past couple of years. Of these, the most promising is cloud computing.

Research firm IDC expects that public IT cloud services spending will surge 124.4% from $56.6 billion in 2014 to over $127 billion in 2018, resulting in a stage of "critical innovation."

According to Joe Weinman, Senior Vice President at Telx and author of Cloudonomics, the growth of the cloud is "creating wealth for those who exploit it, and leading to the demise of those who don't."

This can be seen clearly in the cloud stories of tech giants like Amazon (AMZN -Analyst Report) and Microsoft (MSFT - Analyst Report) that are expanding beyond their core businesses.

Amazon’s Cloud Rising

For Amazon, growth and profits are more often than not mutually exclusive terms, but not in its cloud business. The proof is in its second-quarter results.

Amazon swung to a 19 cent profit in the quarter, blowing past the Zacks Consensus Estimate of a loss of 15 cents.

The biggest reason was AWS. Its revenue share increased by a percentage point, operating profit margin expanded 1,377 bps year over year and operating profit dollars skyrocketed 407.8% (314% ex-Fx). Accounting for just 8% of revenues, AWS contributed more than 36% of profit.

We expect Amazon to double down on AWS (if it hasn’t already), while at the same time expanding its business internationally. The resultant pressure on profits is also likely to continue, in our view.

Satya Nadella’s Microsoft Not Far Behind

Microsoft reported fourth-quarter fiscal 2015 earnings, excluding restructuring charges of 65 cents, which surpassed the Zacks Consensus Estimate of 56 cents.

Shares slumped 4.5% in after-hours trading, a combined effect of weakness in the Windows business and the Nokia write-off that significantly impacted GAAP results.

Disheartened? Don’t be. Take a look at its cloud business.

Office 365 subs are now up to 15.2 million, a 23% increase from March. Even more significant is that 55% of commercial workloads are premium (so more profitable).

Microsoft’s cloud business remains extremely strong although growth rates are understandably dropping off as the business becomes larger. Management stated that the company is on track to deliver $20 billion in commercial cloud revenues by 2018.

These two may look like the super stars of cloud computing (and they are) but as the Judy Garland song goes “Behind every cloud, is another cloud.”

4 Cloud Stocks for You

The cloud computing industry has several promising stocks to choose from. Here are some stocks which could be interesting long-term investment options.

Google Inc. (GOOGL - Analyst Report)

The first company to join these two is none other than the one with all (almost) the answers — Google Inc.

Google connects itsSoftware-as-a-Service (SaaS) platforms to its massive search and software ecosystem through the cloud services. Though Google has never disclosed its cloud services revenues, research firm TBR estimates that the business generated roughly $1.6 billion last year.

In fact, according to Business Insider, Google recently “made a move to leapfrog Microsoft and Amazon in the cloud wars.”

Google acquired the OpenStack Foundation allowing businesses to take advantage of the cloud without forgoing the investment in their own data centers.

The company currently carries a Zacks Rank #2 (Buy) and has a long-term earnings per share (EPS) growth rate of 16.7%, higher than the industry average growth rate of 14.1%.

Cisco Inc. (CSCO - Analyst Report)

Amazon has been leading cloud computing for quite a while, with Microsoft and Google following behind.

It is but obvious that Cisco would want a share of the pie considering how significant it is to the Internet of Things (IoT). Let’s look at its recent acquisitions.

Cisco bought Piston to keep the OpenStack technology alive and take some expertise in-house. With its OpenDNS acquisition, the company gained access to network-based security technology. Lastly, the MaintenanceNet takeover enabled the company to offer novel services for cloud deployments and software as well as sell more services suitable for connected devices.

All these seem focused on the big areas that were emphasized during the last earnings call with analysts held in May — security, IoT and the cloud.

Cisco has a Zacks Rank #2 with an expected long-term earnings growth of 7.9%. The  price-to-earnings ratio (P/E)  is 13.96, which is lower than the industry P/E of 15.60.

SAP SE (SAP - Analyst Report)

The next cloud player worth a look is SAP.

SAP is the recognized leader in providing collaborative e-business solutions for all types of industries across major markets. Recently, SAP reported robust second-quarter results on the back of solid cloud bookings.

Non-IFRS total revenue aggregating €5 billion ($5.5 billion) was up 19.7% year over year. The quarterly results benefited largely from new cloud bookings, which, considered as the key measure for SAP's sales growth, shot up 162%.

The company’s non-IFRS cloud subscriptions and support revenues soared 129%, while non-IFRS cloud and software revenues grew 21%.

SAP sports a Zacks Rank #1 (Strong Buy) with an expected long-term earnings growth of 8.6%.

Equinix, Inc. (EQIX - Analyst Report)

The last company we consider a good cloud investment, is Equinix.

Equinix designs, builds and operates neutral Internet Business Exchange centers where Internet businesses place their equipment and network facilities to interconnect with each other. The neutral IBX centers enable content providers, application service providers and e-Commerce companies to directly connect with a competitive choice of bandwidth providers, Internet service providers and site and performance management companies.

Data centers have become an integral part of our lives as the need to remain connected 24/7 through mobile devices generates an ever-increasing amount of data that need to be stored securely and processed.

The company currently carries a Zacks Rank #1 (Strong Buy) and has a long-term EPS growth rate of 17%, above the industry average growth rate of 12.3%.

Look Up to the Clouds

We think it’s time to enjoy the clouds as tech titans embrace them with open arms.

Given its scope and advantages (cost, scaling, convenience, etc.) it’s not surprising that the demand for cloud computing software and applications is increasing. Cloud vendors usually offer the infrastructure or other technology as a service, which further reduces costs for users.

According to Centaur Partners, theSaaS and cloud-based business applications are likely to grow from $13.5 billion in 2013 to $32.8 billion in 2016, reflecting a compounded annual growth rate (CAGR) of 19.5%. Moreover, Computerworld forecasts that 42% of IT decision makers are planning to increase spending on cloud computing in 2015.