Investors' interests in the tech industry remain red hot. While semiconductor stocks remain bright on their radars, many are also paying close attention to cloud computing exchange-traded funds (ETFs) as a way to broaden their exposure.
Exchange-Traded Fund (ETF)
The cloud represents an increasingly critical component of operations for businesses, and it's a term that many companies are bandying about frequently. It may be challenging for investors to keep track of the nuances related to the cloud. In essence, cloud computing companies provide customers with resources to perform computational operations over the internet.
From companies like Amazon (AMZN -0.35%), which provides infrastructure-as-a-service through Amazon Web Services, to software-as-a-service (SaaS) companies like Salesforce (CRM -0.96%), there are numerous opportunities for cloud-related investments.
Individual companies specializing in cloud computing may appeal to some. Others may be motivated to invest in this burgeoning niche of the tech industry while also mitigating the risks associated with investing in a single company. And still others may be drawn to cloud computing ETFs as a way to diversify their exposure to cloud-based businesses beyond investments in cloud storage or cloud security stocks.
Why invest?
Why invest in cloud computing ETFs?
From the growth of the artificial intelligence (AI) industry to increasing interest in cybersecurity, numerous tailwinds are contributing to the growth of the cloud computing industry. And this growth is expected to continue.
According to business research firm Grand View Research, the global cloud computing market was valued at $752.4 billion in 2024 and is expected to grow at a compound annual growth rate (CAGR) of 20.4%, reaching $2.4 trillion in 2030, up from $943.7 billion in 2025. While some investors may have a single goal motivating them to pick up a position in a cloud-based ETF, there are a variety of benefits:
- Diversification of cloud-oriented stocks
- Access to leading tech stocks
- Potential for strong growth
- Mitigated risk of investing in single companies
- Exposure to innovation
How to invest
How to invest in cloud computing using ETFs
Before clicking the buy button on one of the best cloud ETFs, investors must perform their due diligence, researching the various options to determine whether the fund's holdings, goals, and expense ratios align with their own interests. Here are the steps to take to invest in a cloud technology ETF:
- Open your brokerage app: Log in to your brokerage account, where you manage your investments.
- Search for the stock: Enter the stock ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select the order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
5 best ETFs
5 best cloud computing ETF investments in 2025
1. First Trust Cloud Computing ETF
With about $3.2 billion in net assets, the First Trust Cloud Computing ETF (SKYY -0.18%) aims to match the performance of the ISE CTA Cloud Computing Index. The index comprises 61 stocks engaged in the cloud computing industry.
In addition to leading platform-as-a-service stocks like Amazon and IBM (IBM -0.87%), the fund's largest position, the First Trust Cloud Computing ETF holds SaaS stocks, such as Microsoft (MSFT 0.1%), the ETF's second-largest holding, and infrastructure-as-a-service stocks.
For the 10-year period ending April 1, 2025, the First Trust Cloud Computing ETF had provided a total return of 268.6%. The ETF has a 0.60% expense ratio, and it's rebalanced quarterly.
2. Global X Cloud Computing ETF
Investors looking for a greater growth opportunity will likely be drawn to the Global X Cloud Computing ETF (CLOU -1.24%). Striving to match the performance of the Indxx Global Cloud Computing Index, the Global X Cloud Computing ETF has 37 holdings and $277 million in net assets.
The fund leans toward more speculative investments, such as the two largest positions: Snowflake (SNOW 0.67%), which provides a cloud-based platform suited for machine learning analytics, and Twilio (TWLO 0.82%), which provides AI tools for developers to communicate with clients. With a 0.68% expense ratio, the Global X Cloud Computing ETF provided a 43.3% total return from its inception on April 12, 2019, through April 1, 2025.
3. WisdomTree Cloud Computing Fund
The WisdomTree Cloud Computing Fund (WCLD -0.68%) represents another stellar opportunity for those seeking high-growth potential. The fund strives to match the performance of the BVP Nasdaq Emerging Cloud Index, which WisdomTree characterizes as an index of "emerging public companies focused on delivering cloud-based software to customers."
While the WisdomTree Cloud Computing Fund represents industrials, financials, and healthcare stocks, its information technology stocks represent the lion's share -- about 88.5%. Specializing in cloud-based software solutions for the real estate industry, AppFolio (APPF -0.53%) is the ETF's largest position, while Okta (OKTA 0.82%) and Dropbox (DBX -1.4%) round out the top three holdings.
From its inception in September 2019 to April 1, 2025, the WisdomTree Cloud Computing Fund, which has a moderately low 0.45% expense ratio, had climbed 29.8%.
4. iShares Expanded Tech-Software Sector ETF
For more than 20 years (since its launch in July 2001), the iShares Expanded Tech-Software Sector ETF (IGV -0.26%) has enabled investors to gain exposure to the software industry, as well as interactive home entertainment and interactive media stocks. For those seeking broad exposure to cloud stocks, not merely cloud computing, this ETF is worth further investigation.
Naturally, familiar cloud computing stocks figure prominently in the ETF. Microsoft and Salesforce, for example, represent the two largest positions of the 116 holdings, with a combined weighting of more than 16%. Other cloud computing leaders, such as Adobe (ADBE -1.64%) and ServiceNow (NOW -1.57%), are also prominently featured, with weightings of around 6% each.
For the 10-year period ending April 1, 2025, the iShares Expanded Tech-Software ETF had soared 372.3%. Those looking for low management fees will find the ETF even more appealing, given its 0.41% expense ratio.
5. Fidelity Cloud Computing ETF
Another lower-cost option for cloud computing investors is the Fidelity Cloud Computing ETF (FCLD -0.67%), with its 0.40% net expense ratio. With more than $75 million in net assets, this ETF aims to match the performance of the Fidelity Cloud Computing Index -- an index of companies facilitating the adoption of cloud computing.
Microsoft, Oracle (NASDAQ:ORCL), and ServiceNow represent the three largest positions in the Fidelity Cloud Computing ETF, which has 50 holdings. In addition to cloud computing specialists, the fund includes data center real estate investment trusts (REITs) Equinix (NASDAQ:EQNX) and Digital Realty Trust (DLR -0.55%) -- companies that provide the physical infrastructure for cloud computing -- and other cloud stocks.
The ETF doesn't have a long history, so it's important to take its performance with a grain of salt. Since the fund's inception in October 2021, its value has declined by about 17%.
Related investing topics
Should I invest?
Should I invest in ETFs?
For investors seeking broad exposure to a sector or a specific niche within a sector, but who are hesitant to invest in individual equities due to associated risks, buying an ETF is a logical choice. For those bullish on cloud computing, investing in a cloud computing ETF is a savvy move that mitigates the risks of any single stock suffering a downturn.
FAQ
Cloud computing ETF FAQs
How do cloud computing ETFs perform compared to traditional tech ETFs?
In general, broad tech ETFs, such as the Vanguard Information Technology ETF and Technology Select Sector SPDR, have outperformed cloud computing ETFs.
What risks are associated with investing in cloud computing ETFs?
Cloud computing is a young industry, so cloud computing stocks included in cloud computing ETFs may exhibit increased volatility.
How do cloud computing ETFs compare to individual cloud stocks?
It's difficult to say categorically how well cloud computing ETFs have performed compared to individual cloud stocks. Some cloud stocks have provided sizable returns, while others have underperformed the market.
Are cloud computing ETFs suitable for long-term investing?
Long-term investors would certainly benefit from cloud computing ETFs. It's still early innings for the cloud computing industry, which is expected to grow considerably over the coming years. For those willing to ride out near-term volatility, the rewards associated with buying cloud computing ETFs may be substantial.
