Cloud computing stocks rally to record highs despite broad market plunge and global conflict

Cloud computing and enterprise software stocks recorded their best daily performance in nearly a year on Thursday, March 5, 2026. The WisdomTree Cloud Computing Fund (WCLD) jumped 2.7% even as the overall market was battered by a triple-threat of a Dow Jones plunge, a massive Sensex crash, and a spike in oil prices tied to the escalating Middle East conflict.

Investors appeared to treat cloud infrastructure as a "digital safe haven," doubling down on the sector as OpenAI’s recent $110 billion funding round and Microsoft’s "air-gapped" sovereign AI launch reaffirmed the long-term structural demand for high-end computing.

The green oasis in a red market

While the Nasdaq and S&P 500 struggled under the weight of "risk-off" sentiment following Iranian strikes in the Gulf, selective buying transformed cloud tickers into the market’s rare bright spot.

Software-as-a-Service (SaaS) leaders like ServiceNow and Salesforce saw significant inflows, while analysts at Zacks noted that ServiceNow is projected to grow revenue by 20% in 2026, making it a "must-buy on the dip" for institutional investors.

The 2.7% rally for the WCLD ETF was particularly notable given that the fund had been down roughly 16.2% year-to-date. Traders are increasingly betting that the "AI supercycle" will protect cloud earnings even if the global economy faces a recession.

Infrastructure winners

Marvell Technology and Celestica posted massive gains, with Marvell jumping over 10% on news of increased capital expenditure from hyperscalers like Amazon and Google.

The ‘pick-and-shovel’ pivot

The rally was fueled by a growing realization that the massive AI investments by "The Big Four" (Amazon, Alphabet, Meta, and Microsoft), totaling an estimated $660 billion for 2026, are directly padding the pockets of the cloud ecosystem.

• The TSMC signal: TSMC management recently labeled the AI megatrend as a "multi-year pull," prompting a surge in demand for specialized AI cloud capacity.

• Capital expenditure boom: In early 2026, major firms significantly raised their capex guidance. Taiwan Semi raised its 2026 target to $56 billion, blowing past its 2025 figures and signaling that the physical build-out of the cloud is accelerating, regardless of geopolitical volatility.

• Oracle’s momentum: Ahead of its Q3 earnings report on March 10, Oracle is seeing intense interest. Its Remaining Performance Obligations (RPO) have surged to over $523 billion, a 438% year-over-year increase driven by its sovereign cloud contracts and partnerships with Nvidia.

Market skepticism

Despite the rally, some veteran investors, including Michael Burry, remain wary of the sector's long-term sustainability.

Burry has warned that Big Tech is "burning through cash flow" and borrowing at record levels to finance data centers. He cautioned that today’s $40,000 GPUs could become "tomorrow’s write-offs" as hardware cycles accelerate.

Also, while cloud infrastructure is booming, "incumbent" software companies face the risk of being disrupted by the very AI they are hosting.

Then with forward P/E ratios for leaders like Amazon and Alphabet hovering around 27, expectations are sky-high. If AI monetization fails to materialize in the latter half of 2026, the current rally could face a "painful correction."

"Traders are buying the pipes and the power," said one New York analyst. "In a world where physical geography is becoming more dangerous, the digital geography of the cloud looks like the only place left to grow."