One investment theme that I think could be well worth gaining exposure to is cloud computing.

Cloud computing is the on-demand availability of computer system resources such as data storage and computing power without direct active management by the user.

It is because of the cloud that you can watch Netflix on demand wherever you are, do your accounting on the go, and have Zoom meetings with colleagues.

And as you might have noticed, particularly during the pandemic, more and more software and services are going to the cloud.

This shift to the cloud is expected to accelerate in the coming years. So much so, research by Statista shows that the size of the public cloud computing services market is expected to grow from US$227.8 billion in 2019 to US$354.6 billion by 2022. This is an increase of almost 56% in just three years and is unlikely to stop there.

The good news for Australian investors is that there are a couple of quality shares which have direct exposure to the cloud.

I believe this bodes well for their future growth and could make them great long term investments. Here’s why I like them:

Megaport Ltd (ASX: MP1)

The first ASX share you can buy to gain exposure to the cloud computing boom is Megaport. It offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. As of the end of March, Megaport was serving 1,777 customers out of 329 data centres globally. Both its footprint and customer numbers have been growing at a rapid rate over the last couple of years and look likely to continue thanks to the growing cloud usage.

NEXTDC Ltd (ASX: NXT)

Another way to gain exposure to cloud computing is through NEXTDC. It is one of the world’s most innovative data centre operators with a total of 9 centres across 5 capital cities. Its customers are supported by more than 550 partners that form its highly skilled and network-rich partner ecosystem. The company believes this makes it Australia’s only truly channel centric data centre solutions provider, offering complete service neutrality. Demand for capacity within its centres has been growing at a rapid rate over the last few years. I expect this trend to continue and drive strong earnings growth as it scales.

More reading

• Could these sensational ASX shares help you beat the market?
• Are Megaport shares the ones to buy and hold beyond 2030?
• Why I’m not afraid to invest in shares during this recession
• The smartest ASX 200 shares to buy with $2,500 today
• 1 ASX 200 tech share to buy and hold for a decade

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It has been another stellar day for the Afterpay Ltd (ASX: APT) share price.

On Wednesday the payments company’s shares continued their positive run and charged 7.5% higher to end the day at $54.52.

At one point the Afterpay share price was up over 8% to a new record high of $54.85.

Why did the Afterpay share price hit a record high today?

The catalyst for this gain appears to have been a broker note out of Bell Potter.

According to the note, the broker has retained its buy rating and lifted the price target on Afterpay’s shares to a lofty $65.00. This price target implies potential upside of over 19% from today’s close price.

The broker believes that integrating its platform with key ecommerce and payment infrastructure players will be key drivers of underlying sales growth in the future.

It notes that Afterpay is working with both Visa and Mastercard. It also believes there is potential for it to expand its relationship with eBay into the US or UK markets. Afterpay is currently available on eBay’s Australian platform.

In addition to this, Bell Potter sees opportunities for Afterpay and WeChat owner Tencent Holdings to collaborate over the medium term. Given the clout that Tencent has in the Asian market, this could be a very big deal.

And finally, while Afterpay’s shares may trade at a significant premium to the market average, Bell Potter notes that it trades on lower multiples than sector peer Shopify. This is despite it having double the sales growth trajectory of the Canadian ecommerce giant.

Should you invest?

While Afterpay is certainly a high risk option due to the aforementioned premium its shares trade at, I believe it has the potential to more than justify this.

Overall, I think Afterpay can be a giant of the payments industry in the future, which is why I would still buy it with a long term view.

Though, given the risks involved, it might be prudent to restrict an investment to just a small part of a balanced portfolio.

More reading

• Afterpay share price up 7%, ASX 200 edges higher
• 3 ASX shares to buy for the big shift to contactless payments
• Afterpay share price overbought says analyst
• The Sezzle and Pointsbet share prices have hit new, all time highs. Time to invest?
• Why I would buy Afterpay and these exciting ASX tech shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Novatti Group Ltd (ASX: NOV) share price had an impressive run on the market today, finishing 11.11% higher after rallying as much as 20% in early morning trade.

Novatti is in the business of digital banking and payments. Through technology, the company aims to position its customers to thrive in the growing cashless economy.

Novatti has a number of transaction processing services under its banner. This includes ChinaPayments (a bill payment service), Flexepin (an open-loop cash voucher service), and Flexewallet (for remittance and compliance services).

Overall, the company has a wide range of software solutions in the banking and payments space, including consumer digital wallets, mobile money, and voucher management systems.

Why did the Novatti share price jump today?

Well, this morning, Novatti announced it has partnered with Alipay to enable in-app BPAY bill payments via its ChinaPayments platform.

More specifically, the China-focused, cross-border payments platform, ChinaPayments, has been added directly to the main page of Alipay’s app. As a result, Alipay users will be able to directly pay their Australian bills within the app.

For some background, Novatti launched ChinaPayments in early 2018 as a first-to-market platform enabling Chinese residents to pay Australian BPAY bills using Chinese currency. So, for example, a Chinese student might use the platform to pay for things like education fees, utilities, rent, and phone bills.

Novatti believes the platform is an innovative solution that enables Chinese residents to pay their Australian bills easily, while also improving the cashflow of Australian billers through on-time payment.

According to Novatti, more than 500 BPAY billers have received payments through the ChinaPayments platform over the past year.

Commenting on its partnership with the Chinese payments giant, Novatti’s managing director, Peter Cook, said:

“Novatti has enjoyed a constructive partnership with Alipay, a global major third-party mobile and online payments platform. Our close co-operation has led to the integration of ChinaPayments into the Alipay platform and validates our strategy of working with tier one providers.”

Mr Cook closed out his comments by stating that the integration into Alipay has led to an immediate increase in consumer enquiries, social media interaction and ultimately, more transactions on the ChinaPayments platform.

The Novatti share price closed at 25 cents today, taking the company’s market capitalisation to around $46 million.

More reading

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• 3 high yield ASX dividend shares for income

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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