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3 AI Cloud Stocks With Recurring Revenue Investors May Be Missing

Simply Wall St · 2d ago

Artificial intelligence and cloud computing are drawing huge attention after Alphabet’s Q2 2026 report put AI spending, Google Cloud’s rapid 64% YoY growth estimate, and the sustainability of capital expenditures in the spotlight. At the same time, new lower cost Gemini models, questions about AI talent departures, and resilient digital ad revenues from Search and YouTube are reshaping expectations. For investors, this news is a reminder that heavy AI and cloud investment can help or hurt, depending on execution and pricing power. Below, three stocks from our AI and Cloud Technology Leaders screener appear closely exposed to these themes.

Guidewire Software (GWRE)

Overview: Guidewire Software provides cloud based software and data platforms that run core policy, billing, claims, and analytics systems for property and casualty insurers worldwide, helping them modernize operations and use AI to price risk and handle claims more efficiently.

Operations: Guidewire generates all of its US$1.4b in revenue from software and programming, with around US$914.2m from the United States and the rest primarily from EMEA, Canada, APAC, and other Americas.

Market Cap: US$11.9b

Guidewire Software sits at the center of insurers’ push into cloud based, AI powered systems, which is back in focus after Alphabet’s heavy AI and cloud spending highlighted how much value enterprises place on data infrastructure. Guidewire is already embedding AI across underwriting and claims, supported by products like Guidewire Predict and real world deployments such as Germania Mutual and Peel Mutual using its AI assistants. Earnings growth, rising margins, and strong annual recurring revenue trends have drawn positive attention from several brokers. However, the P/E is high, and recent insider selling and reliance on external borrowing are important watchpoints. For investors who see insurance technology as a potential long term compounder, the full Guidewire story may warrant a closer look.

Guidewire’s rising margins and insurance cloud footprint hint at a much bigger story that many investors may be missing, especially with that high P/E and insider activity in the background. It is worth scanning the 4 key rewards and 1 important warning sign

NYSE:GWRE P/E Ratio as at Jul 2026
NYSE:GWRE P/E Ratio as at Jul 2026

Calix (CALX)

Overview: Calix provides cloud based software, Wi Fi systems, and managed services that help broadband service providers run their networks, launch new home, business, and community offerings, and manage subscribers through AI assisted tools.

Operations: Calix generates about US$1.1b in revenue from developing, marketing, and selling communications access systems and software, with around US$1.0b from the United States and the rest from Europe, other Americas, and the rest of the world.

Market Cap: US$2.4b

Calix is closely aligned with the AI and cloud themes driving interest after Alphabet’s update, as it supplies the cloud platforms and Wi Fi hardware that broadband providers rely on to roll out data hungry services. The company is emphasizing AI native features and a third generation cloud platform, which management links to higher recurring software and services revenue. Recent results show record quarterly revenue and growing software and services contributions even as memory costs pressure margins. Risks around customer concentration, higher compliance costs, and intense competition are present. However, a transition toward higher quality earnings and active share buybacks suggests that investors who only look at past share price underperformance may be overlooking a story tied directly to rising cloud and AI demand.

Calix’s push into AI native cloud platforms and higher quality recurring revenue appears to be an underappreciated shift in its story. See how the analyst forecasts for Calix ties that evolution to one crucial pressure point investors often overlook.

NYSE:CALX Revenue & Expenses Breakdown as at Jul 2026
NYSE:CALX Revenue & Expenses Breakdown as at Jul 2026

Klaviyo (KVYO)

Overview: Klaviyo provides a cloud based B2C CRM platform that helps brands bring their marketing, customer service, and data analytics into one system so they can send targeted messages, run campaigns, and support shoppers across email, mobile, social, and web. Its tools include AI driven marketing and customer agents, a data platform, and real time analytics that aim to make personalized, automated engagement easier for businesses of all sizes.

Operations: Klaviyo generates about US$1.3b in revenue from internet software, with around US$778.7m from the United States and the rest from the United Kingdom, other EMEA, Asia Pacific, and other Americas.

Market Cap: US$5.2b

Klaviyo sits in the slipstream of Alphabet’s heavy AI and cloud spending, because its pitch is using AI driven agents and a cloud native data platform to help brands turn first party data into sales and service conversations. The stock combines strong earnings growth forecasts and share buybacks with a P/S that is below some peer averages. This has attracted interest from several brokers. At the same time, Klaviyo is still unprofitable, relies on higher risk external funding, and faces rising infrastructure and messaging costs plus intense competition from larger software suites and newer AI players. For investors watching how AI spending filters into revenue, this mix of growth runway, valuation appeal, and funding and margin risks can be easy to overlook at a glance.

Klaviyo’s mix of growth expectations, buybacks, and a P/S below some peers suggests that the market may not have fully priced in the story yet, and the analyst forecasts for Klaviyo could reveal the one tension that really matters.

NYSE:KVYO P/S Ratio as at Jul 2026
NYSE:KVYO P/S Ratio as at Jul 2026

The three stocks here are only a starting point, and the full Artificial Intelligence (AI) and Cloud Technology Leaders screener on Simply Wall St highlights 41 more companies with equally compelling narratives that may fit what you are looking for. Unlock fresh ideas, identify specific catalysts, and analyze the stories that matter most to you by heading to the Artificial Intelligence (AI) and Cloud Technology Leaders screener.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.