Cloud service stocks set to gain from Wuhan virus outbreak

Quarantining, working from home and increased demand for digital services boost cloud tech outlook

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The LG stand at Mobile World Congress, in Barcelona.

The LG stand at Mobile World Congress, in Barcelona. (AP photo)

TAIPEI (Taiwan News) — Shares in cloud services are likely to rebound in the second quarter when Wuhan virus (COVID-19) cases are expected to gradually taper off, according to market analysts.

The markets are optimistic about the prospects of cloud and data center services amid the ongoing virus threat. This is due to an increasing number of workers forced to work at home and the rising demand for video conferencing, reported CNA.

While the epidemic is disrupting the global supply chain and hurting energy and raw material stocks, tech shares, particularly cloud services, remain relatively robust, said Kuo Chi-wei (郭智瑋), fund manager at UPAMC Global Innovative Tech Fund.

Tech analyst firm Canalys estimates global expenditure on data centers and cloud infrastructure will grow by 32 percent annually to US$141 billion. The momentum is likely to be sustained for the next five years as demand for data storage, artificial intelligence, and cloud applications surges in the finance and medical sectors.

According to Taiwan Mobile, the nation’s second largest telecom company, it has teamed up with local hospitals to strengthen disease prevention capabilities amid the continuing spread of the novel virus. A communications app, cloud-based video conferencing platform, among other applications, have been developed to help medical institutions fight the virus, wrote China Times.