Microsoft, T-Mobile, Verizon among Oppenheimer's top cloud, telco stocks for 2023
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Microsoft (NASDAQ:MSFT), T-Mobile (NASDAQ:TMUS) and Verizon (NYSE:VZ) are among investment firm Oppenheimer's top cloud and communications stocks for 2023 for a variety of reasons.
Analyst Timothy Horan noted that cost-cutting and customer spending consolidation are likely to be big themes in 2023, with customers increasingly likely to save money on bundles of compute, network, security and applications via Amazon's (NASDAQ:AMZN) Web Services and "particularly" Microsoft (MSFT), via its Azure cloud platform and Office 365 bundle.
"Long term, 'Triple-A' cloud platforms (AWS, Azure, Alphabet) ... will likely dominate communication networks, with telcos or cable relegated to last mile," Horan wrote in a note to clients, adding that the rise of cloud computing will enable new applications and continued improvements in artificial intelligence due to rising data collection from edge computing. 
Horan also noted that both T-Mobile (TMUS) and Verizon (VZ), which was recently upgraded by Morgan Stanley, are pursuing a one wireless network service strategy to help subscribers save money.
The analyst pointed out that revenue from incremental bundled services has "high margins," which both T-Mobile (TMUS) and Verizon (VZ) are pursuing, as are Amazon (AMZN) and Microsoft (MSFT). 
Other niche cloud providers such as Amdocs (DOX), Nice Systems (NICE) and Verint Systems (VRNT), along with data center company Equinix (EQIX) and companies that provide equipment for cloud and wireless that would benefit from the opening of the supply chain, like Cambium Networks (CMBM).
"All are attractive double-digit growers with reasonable valuations and balance sheets that benefit from secular trends with limited cyclical exposure," Horan wrote.
Analysts are largely cautious on Verizon (VZ). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Additionally, Seeking Alpha's quant system, which consistently beats the market, rates VZ a HOLD.