Hello dear Getquin Community,

After $ORCL (-1,44%) Oracle caused quite a stir after the last quarterly figures and the market reacted extremely positively with a 40 percent increase in the share price, so much so that CEO Larry Ellison briefly became the richest person in the world overnight, I wanted to unravel the magic and find out exactly which division caused this tremor.

The answer is Cloud Infrastructure, or OCI for short. In this area, the demand for data centers for artificial intelligence has exploded, which has brought Oracle long-term orders worth 455 billion US dollars. However, it is not only Oracle that is benefiting, but also other hyperscalers, regional challengers and, above all, the so-called shovel manufacturers that provide the basic infrastructure.

I have taken the trouble to look for potential competitors and up-and-coming challengers so that you have a complete overview of this sector. I have divided the whole thing into the following segments: 🌍 Big players (hyperscalers), 💡 Hidden champions (selection by region), ⚒️ Shovel manufacturers (infrastructure suppliers) and, as always, my favorite.

If I have overlooked any important aspects or a classification was not entirely precise, I look forward to your comments and exciting additions. Together we can understand this topic even better and learn from each other.

Feel free to leave a 👍. I wish you every success with your investments 🚀

🌍 Big Player (Hyperscaler)

Amazon Web Services - $AMZN (-1,03%) (USA, Nasdaq) → World market leader with >30 % market share, huge data centers & own AI chips (Trainium, Inferentia)

Microsoft Azure - $MSFT (+0,26%) (USA, Nasdaq) → second largest provider, strong AI focus through OpenAI partnership

Google Cloud - $GOOGL (-0,61%) (USA, Nasdaq) → third largest provider, specialized in AI workloads & big data

Oracle Cloud Infrastructure (OCI) - $ORCL (-1,44%) (USA, NYSE) → Number 4 worldwide, currently fastest growth (+70-80 %), RPO USD 455 bn

Alibaba Cloud - $BABA (-1,18%) , $9988 (-1,01%) (China, NYSE/HKEX) → Market leader in Asia, complete cloud suite from IaaS to AI

Favorite: Oracle - $ORCL (-1,44%)

Oracle impresses with its cloud infrastructure OCI, which recently collected orders worth 455 billion US dollars. The moat lies in the close integration of the database business and cloud services as well as the multi-cloud partnerships with Microsoft and Google. The compounder property is the result of long-term contracts and economies of scale in data center construction.

Alternative favorite: Alibaba Cloud - $BABA (-1,18%) , $9988 (-1,01%)

Alibaba is number one in Asia and number four worldwide. The moat lies in the close integration with Alibaba's e-commerce and fintech ecosystem. The compounder property stems from the enormous growth in emerging markets and the increasing demand for cloud services in China. While the stock is valued significantly cheaper than Oracle, there are geopolitical and regulatory risks.

💡 Hidden champions (selection by region)

🇪🇺 Europe

OVHcloud - $OVH (+0,7%) PA (France) → largest European cloud provider, GDPR- and Gaia-X-focused

Scaleway - private (France, part of the Iliad Group) → Developer and AI cloud platform

T-Systems - part of $DTE (-0,22%) DE (Deutsche Telekom, Germany) → Hybrid & Sovereign Cloud for Public Sector

IONOS - $IOS (-4,73%) DE (Germany, Xetra)

Largest European web hosting and SME cloud provider. Burggraben: strong brand and high customer loyalty in the SME sector.

Aruba Cloud - private (Italy) → regionally strong in SMEs & hosting

Outscale - private (France, subsidiary of Dassault $DSY.PA) → Industrial Cloud & Simulation

Favorite: OVHcloud - $OVH (+0,7%)

Burggraben: strong position as a GDPR-compliant sovereign cloud with Gaia-X. Compounder: increasing trust from authorities and companies ensures growing recurring revenues.

🇨🇳 China

Baidu AI Cloud - part of $BIDU (+1,59%) , $9888 (+1,33%) (Nasdaq, China/USA) → AI workloads, autonomous driving, language models

JD Cloud - part of $JD (-2,2%) , $9618 (-1,78%) (Nasdaq, China/USA) → Cloud for e-commerce & retail

Kingsoft Cloud - $KC (-2,62%) , $3896 (-2,26%) (Nasdaq, China/USA) → Gaming, streaming and app cloud

China Telecom Cloud - part of $728 HK (HKEX) → Infrastructure cloud, state-supported

China Mobile Cloud - part of $941 HK (HKEX) → 5G edge cloud with telecom backbone

Favorite: Kingsoft Cloud - $KC (-2,62%) , $3896 (-2,26%)

Moat: Specializing in gaming, streaming and mobile apps with deep integrations into ecosystems. Compounder: benefits from China's growing online consumption and strong embedding in the Tencent environment.

🇯🇵 Japan

NTT Communications - part of $9432 (+0,73%) T (Tokyo) → Enterprise cloud with global network

NEC Cloud - $6701 (+0,77%) T (Tokyo) → Government & security solutions

Fujitsu Cloud K5 - $6702 (+4,99%) T (Tokyo) → Hybrid cloud for large companies

Rakuten Symphony Cloud - part of $4755 (+2,2%) T (Tokyo) → 5G & telecom cloud

IIJ Cloud - $3774 (+0,34%) T (Tokyo) → Cloud pioneer for enterprise IT

Favorite: NTT - $9432 (+0,73%)

Moat: global telecom backbone and huge enterprise customer base. Compounder: expansion of data centers in Asia and Europe with stable recurring revenues.

🇮🇳 India

Reliance Jio Cloud - part of $RELIANCE NS (NSE India) → Telecom Cloud, partnership with Azure

Tata Communications IZO - $TATACOMM NS (NSE India) → Hybrid cloud & global backbone

Infosys Cobalt - $INFY (NYSE/NSE India) → Cloud migration platform & consulting

HCLTech Cloud - $HCLTECH NS (NSE India) → AI-powered hybrid cloud

Wipro Cloud Studio - $WIPRO NS (NSE India) → MultiCloud service provider

Favorite: Tata Communications - $TATACOMM

Moat: global fiber optic network and deep networking in hybrid cloud. Compounder: growing international expansion and increasing demand for multi-cloud solutions.

🌏 Asia / Oceania

Naver Cloud - part of $035420 KQ (Korea KOSDAQ) → AI & gaming cloud

Samsung SDS Cloud - $018260 , $SMSN (+1,29%) KQ (Korea KOSDAQ) → Enterprise & IoT Cloud

KT Cloud - part of $030200 KQ (Korea KOSDAQ) → Telecom & Edge Cloud with 5G

Telstra Cloud - $TLS (-0,47%) AX (Australia) → Telecom Cloud, Asia-Pacific focus

Macquarie Telecom Cloud - $MAQ AX (Australia) → Public Sector & Compliance

Favorite: Naver Cloud - $035420

Moat: strong integration of AI and gaming in Korea. Compounder: rapid scaling due to growing demand for AI and ML applications.

🌍 Latin America

UOL Diveo (Compasso UOL) - private (Brazil) → Cloud + Managed Services

Tivit Cloud - private (Brazil) → MultiCloud for industry & banks

Locaweb Cloud - $LWSA3 SA (Brazil) → SME Hosting & Cloud

Claro Cloud - part of $AMX (-0,83%) (Mexico, NYSE/HKEX) → Telecom Cloud in Latin America

DesireCloud - private (Chile/Peru) → Local provider for companies

Favorite: Locaweb - $LWSA3

moat: Market leader for SME cloud and hosting in Brazil. Compounder: enormous scalability through the digitalization of small and medium-sized enterprises throughout Latin America.

🇨🇦 Canada

OVHcloud Canada - part of $OVH (+0,7%) PA (France) → Data centers for North America

SherWeb - private (Quebec) → Cloud and MSP services for SMEs

HostPapa - private (Canada) → SME cloud solutions

Canadian Web Hosting - private (Canada) → Cloud & hosting with a focus on data protection

Beanfield Cloud - private (Toronto) → Cloud combined with fiber optic infrastructure

Favorite: SherWeb - private

Moat: close ties to SMEs via managed services. Compounder: fast-growing cloud ecosystem for small businesses in North America, high customer loyalty.

⚒️ Blade manufacturers (infrastructure suppliers)

🖥️ Semiconductors & Chips

Nvidia - $NVDA (-1,07%) (USA, Nasdaq) → GPUs for AI training & cloud

AMD - $AMD (-3,55%) (USA, Nasdaq) → CPUs/GPUs for Data Center

Intel - $INTC (-0,57%) (USA, Nasdaq) → Server CPUs & AI accelerators (Gaudi)

TSMC - $TSM (+1,12%) (Taiwan, NYSE/TWSE) → largest chip manufacturer, produces for NVIDIA/AMD

Samsung Electronics - $SMSN (+1,29%) KQ (Korea) → Memory, foundry, GPUs/CPUs

Favorite: Nvidia - $NVDA (-1,07%)

Moat: near monopoly in high-end GPUs for AI. Compounder: Ecosystem and network effects through CUDA and developer community.

📦 Data center hardware & servers

Supermicro - $SMCI (-2%) (USA, Nasdaq) → GPU clusters & AI servers

Dell Technologies - $DELL (-3,91%) (USA, NYSE) → Enterprise Servers & Storage

Hewlett Packard Enterprise - $HPE (-0,43%) (USA, NYSE) → Hybrid Cloud & Edge

Inspur - private (China) → AI & Cloud Server

Lenovo - $LNVGY (-0,39%) (China/ADR) → HPC and AI servers

Favorite: Supermicro - $SMCI (-2%)

Moat: Specialization in GPU clusters and AI servers. Compounder: benefits from every expansion of the hyperscalers, extremely high scalability.

⚡ Memory & network chips

Micron - $MU (+1,67%) (USA, Nasdaq) → DRAM & HBM memory

SK Hynix - $HY9H (+4,22%) KQ (Korea) → Memory chips, HBM for NVIDIA

Broadcom - $AVGO (-0,64%) (USA, Nasdaq) → Network Chips & Switches

Marvell - $MRVL (-0,71%) (USA, Nasdaq) → Network & 5G chips

ASE Technology - $ASX (-0,79%) (Taiwan, NYSE) → Packaging for high-end chips

Favorite: Broadcom - $AVGO (-0,64%)

Moat: deep roots in network infrastructure of hyperscalers. Compounder: benefits from rising demand for switches and custom chips for the cloud.

🏭 Data centers / colocation

Equinix - $EQIX (+0,75%) (USA, Nasdaq) → largest colocation provider worldwide

Digital Realty - $DLR (+2,41%) (USA, NYSE) → Data centers worldwide, strong in Europe/USA

China Telecom DC - part of $728 HK (HKEX) → Data center infrastructure in China

NTT Data Centers - part of $9432 (+0,73%) T (Tokyo) → Data centers in Asia/Europe

NEXTDC - $NXT (+0,53%) AX (Australia) → Growing data centers in the APAC region

Favorite: Equinix - $EQIX (+0,75%)

Moat: global networking and extremely high switching costs for customers. Compounder: continuous expansion and cross-selling potential through platform structure.

🔋 Energy & cooling

Schneider Electric - $SU (-0,27%) PA (France, Euronext) → Power & Cooling for Data Center

ABB - $ABBN (+0,37%) (Switzerland, SIX/NYSE ADR) → Energy & Automation

Siemens Energy - $ENR (-2,26%) (Germany, Xetra) → Power Grids & Data Center Technology

Vertiv - $VRT (-0,99%) (USA, NYSE) → Cooling, Racks & UPSs

Eaton - $ETN (-1,08%) (Ireland/USA, NYSE) → Power Management

Favorite: Schneider Electric - $SU (-0,27%)

Burggraben: market-leading energy and cooling systems for data centers. Compounder: long-term growth due to increasing demand for efficient data centers.

🌐 Network & Connectivity

Cisco - $CSCO (-0,22%) (USA, Nasdaq) → Router & Network Hardware

Arista Networks - $ANET (+0,78%) (USA, NYSE) → High-speed switches for hyperscalers

Juniper Networks - Acquisition by $HPE (-0,43%) Hewlett Packard HP (USA, NYSE) → Routing & Network Security

Ciena - $CIEN (-1,3%) (USA, NYSE) → Fiber Optics & Optical Networks

Nokia - $NOK (+0,24%) (Finland, NYSE/Helsinki) → 5G & Core Networks

Favorite: Arista Networks - $ANET (+0,78%)

Moat: technological leadership in high-speed switches in hyperscaler data centers. Compounder: enormous growth opportunities due to exponential data traffic in AI workloads.

✨ Takeaway

The Oracle quake shows: Cloud & AI are the growth drivers of the coming years. While hyperscalers are in the spotlight, hidden champions are growing in their niches in the background and blade manufacturers are making money from every expansion of the infrastructure.

👉 Question for you: Do you prefer to focus on hyperscalers in your strategy? hyperscalersthe hidden champions or directly on the shovel manufacturers?

I look forward to your opinions!

Source: own analysis

Image - Image credit: Getty Images

After my first 12 months investing seriously and long term in the markets I can say that I am quite satisfied 😁.

But there are always buts, and yes, I should have been more careful at the beginning of the year, around December I was blinded by the performance of my investments, I failed to see the risks which seen in hindsight were ENOUGH OBVIOUS let's review them:

• The S&P at 30x Earnings when its average is around 18-21x.

• Three years of growth well above its historical average of 10% with no justification other than the rising expectation of AI 🤖

• A 26% Return in just 6 months in my stock portfolio without much change in EPS simply a price increase due to growing demand.

• Almost 3 years of announced Crisis and many experts (Like Warren Buffet) walking away from the Markets and holding Cash positions.

• A Euro dollar rate among the lowest historically basically at par 1€/1.02$.

In all this context to have shares like $GOOGL (-0,61%)
$META (-1,78%) or others that I had at the time such as $AMZN (-1,03%) were not going to help much being the most affected by the correlation of the index and its high Per not to mention the currency effect.

But I went with a very aggressive portfolio and barely kept 5% in money funds or cash 😔 (which also if I had it was by chance not by planning 🤣).

The important thing Lesson Learned, you have to keep a cool head, and maintain a balanced management according to the risks and not be blinded by these situations of "easy money".

However the year has not ended not so bad many of my "bets" have gone fantastically well as well as. $HPE (-0,43%) (+30%) $SMSN (+1,29%) (+15%) $BFIT (+1,53%) (+10%)

And I have diversified into smaller stocks that are not so correlated to the indices and that according to my criteria have the potential to outperform the index

As well as other alternative investment vehicles such as BME Growth and Urbanitae projects.

And of course I keep a reserve but not too big for when opportunities like the ones we saw just a couple of months ago come along ;)

This is how things have been in the aggregate one year later, in the equity portfolio the profitability is somewhat higher, but still it is important to diversify as we said before, we continue working to improve and grow 🔝📈📈

Trading profits reallocated.

I'm taking a falling knife here.

At the low of 2022.