"The profit engine behind software, IT services, and cloud platforms has expanded meaningfully over the past few years as that migration continues. Companies continue shifting workloads to the cloud, and AI-driven infrastructure spending has added another layer of momentum."
"Pure-play cloud software names sold off into early 2026 as investors worried that generative-AI tools might squeeze traditional seat-based SaaS revenue. Funds with greater exposure to hyperscalers held up better, thanks to the surge in AI-related capital spending."
"First Trust Cloud Computing ETF (SKYY) is one of the oldest and largest funds in the category, tracking the ISE CTA Cloud Computing Index. It mixes pure-play cloud software names with non-pure-play cloud firms and hyperscaler conglomerates."
Enterprise digital transformation is the main driver for public and hybrid cloud services, with companies increasingly migrating workloads to the cloud. AI-driven infrastructure spending has further accelerated this trend. While the equity market for cloud software has faced challenges, funds with exposure to hyperscalers have performed better due to increased AI-related capital spending. Interest rates remain a significant factor for growth-oriented cloud investments. The article examines three cloud-computing ETFs, including an established blended fund, a pure-play SaaS vehicle, and a newer low-cost thematic option.
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