Cloud computing stocks are closing out 2025 at the center of one of the market’s most consequential debates: how long Wall Street will keep funding the AI cloud buildout before demanding clearer returns.
On December 21, 2025, the news flow across hyperscalers (AWS, Azure, Google Cloud, Oracle Cloud), cloud security, and enterprise software paints a sector that’s still expanding—but increasingly judged on capital discipline, financing structure, and monetization, not just revenue growth.
Below is a detailed roundup of the latest headlines, forecasts, and analyst takes shaping cloud computing stocks right now, plus what investors are watching as 2026 approaches.
What’s driving cloud computing stocks right now
Three forces are dominating sentiment into year-end:
- AI infrastructure spending jitters vs. “Santa rally” hopes. Reuters notes that investors are weighing massive AI buildout costs alongside shifting expectations for Fed rate cuts in 2026, with attention on whether year-end seasonality can overcome tech-sector skepticism. [1]
- Record data-center dealmaking and a new capex ceiling for 2026. Global data-center transactions hit record levels through November as demand for computing infrastructure surges. [2]
- A “selective” market in AI winners and losers. Goldman Sachs Research argues investors are no longer rewarding “AI spending” broadly—capital intensity and debt funding matter more, while the market prefers clearer links between investment and revenue. [3]
The result: cloud stocks are being re-priced not only on growth, but on who can turn AI-driven demand into profitable, financeable scale.
Market backdrop on December 21: the “Santa rally” question meets AI capex anxiety
Multiple market readouts today converge on the same theme: year-end optimism exists, but AI spending is the wildcard.
Reuters’ “Wall St Week Ahead” report highlights that recent swings have been driven by scrutiny of corporate AI infrastructure spending and uncertainty around the Fed’s path in 2026. It also specifies that the “Santa Claus rally” window starts December 24 and runs through January 5, historically averaging a positive return. [4]
MarketWatch similarly points to improving market breadth and softer inflation/job trends supporting rate-cut expectations—but flags AI valuation and capex concerns, citing Oracle-linked infrastructure worries as a notable stress point. [5]
The Financial Times adds that AI infrastructure spend and volatility have disrupted the usual year-end pattern, with recent weakness tied to disappointing results and sentiment around big tech capex. [6]
Why this matters for cloud computing stocks: cloud leaders are not only beneficiaries of AI demand—they’re also the primary vehicles for the spending that investors are now auditing.
Cloud demand is real: data-center dealmaking hits a record
If the market is debating the “price” of AI, the industry data is reinforcing the “need” for more infrastructure.
Reuters reported that global data-center dealmaking surged to a record high through November, with 100+ transactions totaling just under $61 billion, already topping 2024’s prior record. [7]
Meanwhile, Goldman Sachs Research says the consensus estimate for 2026 hyperscaler capex has climbed to $527 billion—up sharply from earlier in the year—while warning that investors are rotating away from names where earnings growth is pressured and capex is debt-funded. [8]
Translation for investors: the “cloud” part of AI isn’t slowing. The question is whether the stock market will pay the same multiple for every company building it.
Big cloud stock news and catalysts as of December 21, 2025
Amazon (AMZN): AWS, OpenAI talks, and a restructured AI push
Amazon remains one of the most watched cloud computing stocks because AWS scale + custom silicon put it at the heart of enterprise AI economics.
Reuters reported Amazon is in talks to invest about $10 billion in OpenAI, underscoring the relentless demand for compute and the strategic value of anchoring AI workloads to AWS. Reuters also notes OpenAI signed a $38 billion deal in November to buy cloud services from Amazon. [9]
Separately, Reuters reported Amazon is restructuring its AI organization: AWS veteran Peter DeSantis will oversee a new unit spanning AI models, custom chips (including Graviton and Trainium), and quantum computing initiatives, while Rohit Prasad is set to leave by year-end. [10]
Forecasts & analyst framing: A TipRanks roundup today highlighted bullish analyst positioning on Amazon, citing a strong buy consensus and price targets around the $300 range, with analysts pointing to potential AWS growth reacceleration and AI-driven demand. [11]
What investors are really pricing: whether Trainium/Graviton adoption and AI “agents” become meaningful incremental demand on AWS—without compressing margins through a price war.
Alphabet (GOOGL / GOOG): Google Cloud lands a massive security partnership
Google Cloud is pushing hard to convert AI momentum into enterprise wins, and the latest deal flow reinforces that strategy.
Reuters reported Google Cloud expanded its partnership with Palo Alto Networks in a deal said to be approaching $10 billion over several years—described as Google Cloud’s largest-ever security services deal. The partnership includes migration of Palo Alto services to Google Cloud and development of AI-driven cybersecurity offerings. [12]
The same Reuters report notes the broader security arms race around cloud + AI, referencing Google’s pending $32 billion Wiz acquisition and Palo Alto’s recent $3.35 billion deal to acquire Chronosphere. [13]
On the infrastructure side, Reuters also reported TotalEnergies signed a 21-year deal to supply renewable power to Google data centers in Malaysia—one more signal that power procurement is becoming a strategic moat in cloud expansion. [14]
Analyst tone heading into 2026: An Investing.com report citing Bank of America commentary argued Alphabet may be well positioned for the “next phase” of AI as focus shifts from pure capex intensity to monetization and returns. [15]
What investors are really pricing: whether Google Cloud can keep landing large enterprise/security deals and translate AI capabilities into durable, higher-margin recurring revenue.
Microsoft (MSFT): less headline noise this week, but still the benchmark for “AI cloud monetization”
Microsoft is still treated as the standard-setter in cloud computing stocks because the market believes Azure has been quickest to monetize AI demand across enterprise relationships.
While Microsoft-specific cloud headlines are quieter today, Reuters reported the U.S. Department of Energy signed AI collaboration agreements with 24 organizations as part of its “Genesis Mission,” including Microsoft and Google—an example of how cloud providers are increasingly embedded in national-scale compute initiatives. [16]
In the broader OpenAI ecosystem, Reuters has previously reported that Microsoft secured a deal where OpenAI would purchase $250 billion of Azure cloud services, while terms around OpenAI’s structure were adjusted—an important backdrop to how cloud providers compete for frontier-model workloads. [17]
What investors are really pricing: whether Azure can maintain AI-fueled growth while sustaining margins as competition heats up across pricing, GPU supply, and enterprise AI agent platforms.
Oracle (ORCL): the most volatile cloud computing stock in the AI buildout
Oracle has become a litmus test for the market’s tolerance of AI-era capex—and this week delivered both bullish catalysts and fresh financing fears.
1) Oracle’s $10B Michigan data center project faces a funding snag
Reuters reported Oracle’s planned $10 billion data center project in Michigan was thrown into uncertainty after Blue Owl Capital withdrew. The report notes Oracle is seeking alternative financial support and that the situation has weighed on investor confidence amid heavy AI infrastructure spending. [18]
This is the exact kind of headline the market is hypersensitive to right now: it’s not only “how much capex,” but how the capex is financed and derisked.
2) TikTok U.S. joint venture creates a new, high-visibility Oracle cloud role
Reuters reported ByteDance signed binding agreements to transfer control of TikTok’s U.S. operations to a new joint venture involving Oracle, Silver Lake, and MGX—where the investor group would control 80.1% and ByteDance retains 19.9%. The deal is expected to close January 22, 2026, and positions Oracle as a key “trusted security partner” for U.S. user data and oversight functions. [19]
The Associated Press similarly reported the joint venture structure and Oracle’s role in managing U.S. data locally, part of the security framework designed to satisfy U.S. concerns. [20]
3) Analyst takes are diverging sharply
A Seeking Alpha analysis published today upgraded Oracle to “buy,” arguing that the selloff has overly discounted Oracle’s cloud growth prospects and backlog, and presenting a long-term bull case price target. [21]
Meanwhile, Reuters has reported on broader concerns around Oracle’s spending and the market’s reaction to capex guidance changes, reinforcing why Oracle has become the poster child for “AI infrastructure ROI scrutiny.” [22]
What investors are really pricing: whether Oracle can convert AI cloud demand into profitable growth fast enough to justify its buildout pace—and whether financing partners remain willing to fund more megaprojects under today’s tighter terms.
Cloud software stocks: the “AI eats SaaS” narrative meets agentic AI reality
Not all cloud computing stocks are hyperscalers. For many investors, the next phase is whether SaaS companies can defend pricing power as AI agents reshape how software is bought and used.
ServiceNow (NOW): acquisition speculation and a “Death of SaaS” warning
Barron’s reported ServiceNow shares fell after reports it was nearing a $7 billion acquisition of cybersecurity startup Armis, alongside a KeyBanc downgrade to “Underweight” and a warning that ServiceNow could face a broader “Death of SaaS” narrative. [23]
Investopedia similarly reported the Armis talks and described investor concerns about the potential cost and strategic impact. [24]
Salesforce (CRM): willing to lose money now to win the AI agent platform war
TechRadar reported Salesforce is comfortable taking short-term losses on pricing for agentic AI tools under a new flat-rate enterprise licensing approach, framing it as a long-term monetization strategy. [25]
What investors are really pricing: whether “agentic AI” expands customer value (and spend) or compresses seat-based pricing models across SaaS.
The AI funding pipeline matters for cloud stocks (and it’s getting intense)
Cloud computing stocks are increasingly tethered to the availability of capital across the frontier AI ecosystem.
Reuters reported SoftBank is racing to fulfill a $22.5 billion funding commitment to OpenAI by year-end, using asset sales and other funding channels, illustrating the scale of financing needed to support data center ambitions like the $500 billion Stargate initiative. [26]
Why this matters for cloud investors:
- More funding for frontier AI companies typically means more demand for cloud capacity (training, inference, storage, networking).
- But the market is now alert to the risk of demand concentration (a few huge buyers) and duration mismatch (multi-year capex today vs. monetization later).
2026 outlook: what matters most for cloud computing stocks from here
Based on today’s news cycle and the direction of analyst commentary, the 2026 setup for cloud computing stocks looks less like a simple “buy the cloud” trade and more like a sorting mechanism.
1) Capex credibility and financing structure
Goldman Sachs Research explicitly notes investors are more skeptical of debt-funded capex and more willing to reward companies showing a clearer link between spend and revenue. [27]
2) “AI attach rate” to core cloud revenue
Deals like Google Cloud’s expanded security partnership with Palo Alto and Amazon’s OpenAI talks reflect the strategic priority: attach AI consumption to durable, enterprise-grade platforms. [28]
3) Security as a growth accelerant
The Google Cloud–Palo Alto deal (approaching $10B) underscores that AI is not just adding compute demand—it’s escalating security demand as well. [29]
4) Energy and data-center constraints become competitive differentiators
Long-duration power deals like Google’s Malaysia agreement highlight that access to power—renewable or otherwise—is becoming central to hyperscaler execution. [30]
5) SaaS pricing models under pressure, but not collapsing
The “AI eats software” storyline is influencing investor multiples, yet SaaS leaders are actively redesigning packaging and licensing around agents and automation. [31]
Key risks cloud stock investors are watching
- AI ROI backlash: The market is increasingly punishing capex surprises and projects with unclear payoff timelines. [32]
- Financing fragility for megaprojects: Oracle’s Michigan project uncertainty after Blue Owl’s exit shows how quickly sentiment can change if partners balk at terms. [33]
- Concentration risk: Cloud growth tied to a few massive AI buyers can magnify volatility if contract timing or funding shifts. [34]
- Policy/regulatory overhangs: The TikTok joint venture illustrates how geopolitics and data security can reshape cloud relationships, sometimes quickly. [35]
Bottom line for December 21, 2025
Cloud computing stocks are entering 2026 with strong demand signals—record data-center dealmaking, escalating AI capex expectations, and heavyweight enterprise deals in security and regulated workloads. [36]
But valuations are no longer being handed out for “AI exposure” alone. The market is transitioning to a tougher question: who can build AI-scale cloud infrastructure profitably, predictably, and with financing that doesn’t spook investors. [37]
References
1. www.reuters.com, 2. www.reuters.com, 3. www.goldmansachs.com, 4. www.reuters.com, 5. www.marketwatch.com, 6. www.ft.com, 7. www.reuters.com, 8. www.goldmansachs.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.tipranks.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. za.investing.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. apnews.com, 21. seekingalpha.com, 22. www.reuters.com, 23. www.barrons.com, 24. www.investopedia.com, 25. www.techradar.com, 26. www.reuters.com, 27. www.goldmansachs.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.reuters.com, 31. www.barrons.com, 32. www.reuters.com, 33. www.reuters.com, 34. www.reuters.com, 35. www.reuters.com, 36. www.reuters.com, 37. www.goldmansachs.com
