Cloud stocks like Adobe and Workday are surging, and some say the best is yet to come 

For some cloud stocks, the sky may be the limit.

Cloud stocks like Adobe and Workday are surging, and some investors say the best is yet to come

Adobe shares surged more than 9 percent Tuesday, the stock's best day since last October. The rise came after Adobe reported quarterly earningsthat beat Wall Street analysts' estimates. Shares of Workday, which rallied 5.7 percent on Tuesday, were up 2 percent in Wednesday's premarket after Bernstein upgraded the stock.

Adobe is one stock in the cloud space that looks solid within a bifurcated group, said Gina Sanchez, CEO of Chantico Global. The stock, up 73 percent in the last year, could continue to soar amid broader market volatility.

"The Nasdaq has been facing real issues and real tests over the last several trading sessions, and I don't think that's going to stop," Sanchez said Tuesday on CNBC's "Trading Nation." "Adobe probably has the best fundamentals. From a fundamental point of view, I think Adobe is probably going to be a clear winner. But I don't think this is a one, unified group."

She pointed to Salesforce as one cloud stock that's overvalued and noted that Adobe is seeing continued growth.

"So that from that perspective, the fundamentals are great. The bigger question is, where is the market going to set forward expectations for pricing and valuation? That could be maybe the one fly in this ointment. But I do actually think that from a fundamental perspective, this is a solid stock," she added.

Adobe also appears well-positioned from a technical standpoint, according to Todd Gordon, founder of TradingAnalysis.com.

"It's a really nice-looking chart. If we go back to the summer of 2017 … it's a very nice symmetrical, rhythmical, very logical up-trend support," Gordon said, examining a chart of the stock that's managed to hold technical support and likely leads to further gains.

Adobe closed 9.5 percent higher on Tuesday, at $260.67 per share.

Vote
Vote to see results
Total Votes:

Not a Scientific Survey. Results may not total 100% due to rounding.

Videos

Trades to Watch

Trader Bios

About

Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more

Connect