Cloud computing stocks are hitting an all-time high as coronavirus forces remote work, according to one measure

Cloud computing stocks are hitting an all-time high as coronavirus forces remote work, according to one measure

Jeff Lawson, CEO, TwilioScott Mlyn | CNBCAn index of cloud stocks developed by venture-capital firm Bessemer Venture Partners reached new highs this week as  U.S. indexes still recover from the selloff that began in February. The BVP Nasdaq Emerging Cloud Index, established in 2013, is up about 31% for the year, while the S&P 500 is down about 9%. The performance has to do with the strength of its constituents: Mostly mid-cap companies that have gone public in the last few years, and that provide specialized cloud services for businesses in areas like human resources, payments or communications.  (Large-cap stocks with major cloud-computing operations like Amazon and Microsoft are not included.) When companies, government agencies and schools cannot as easily access their data center equipment for installing or managing software — for example, because of the coronavirus pandemic — cloud services can provide convenient and potentially less expensive alternatives. Investors have been rewarding these companies for their recent gains, but the trend may not continue as people return to school and work.One of the top performers of the index in the past month is website builder Wix, which has risen 65%. The company has seen greater demand as of late with people wanting to represent themselves online, which led executives to release a “significantly higher outlook for Q2 than we originally expected,” according to its first-quarter earnings statement from last week.Companies have flocked to newer cloud technologies like Twilio for communications and Everbridge for emergency response, and the BVP index has both. Zoom, the video calling software provider that is arguably one of the biggest beneficiaries of the coronavirus pandemic, is part of the index; its stock is up 154% for the year. E-commerce technology provider Shopify, also there, is up 101%. As is the case with the S&P 500 and the Dow Jones Industrial Average, the BVP index itself cannot be traded. However, last year an exchange-traded fund inspired by the index became available. The WisdomTree Cloud Computing Fund closed at record highs on Tuesday and Wednesday.Not all cloud ETFs are at record prices. The First Trust Cloud Computing ETF, whose biggest holding is Amazon, has yet to exceed the levels it reached in February. The Global X Cloud Computing ETF closed at a new high on May 11. WATCH: Shopify COO on how e-commerce is changing retail trends during the pandemic

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