Will CDW's Acquisition of Mission Cloud Services Propel Stock Growth?

CDW Corporation CDW recently solidified its portfolio with the acquisition of Mission Cloud Services Inc., a prominent Amazon Web Services (“AWS”)-focused professional services, managed services and consulting provider. The initiative not only complements CDW's Digital Velocity division, which encompasses cloud, data, AI, and software platform engineering but also expands its market footprint in cloud services. Mission leverages its AWS certification in generative AI to help customers securely transform data into actionable insights using advanced AI and machine learning techniques, offering end-to-end support for AWS-managed environments. By integrating Mission’s expertise, CDW expands its AWS capabilities with a dedicated practice aimed at delivering comprehensive solutions.The acquisition of Mission aligns seamlessly with the company’s three-part growth strategy, added CDW. It accelerates CDW’s mission to deliver customer-oriented results across the entire technology stack and customer lifecycle. With this acquisition, CDW now boasts an impressive 17 AWS Competencies, solidifying its foothold as an AWS Premier Tier Partner. CDW’s acquisition of Mission is expected to give it a competitive edge in the rapidly growing cloud services market. With a stronger AWS practice, the company can expand its reach to new customer segments and geographies. This growth potential is particularly significant in emerging markets, where cloud adoption is accelerating. The growing uptake of CDW’s solutions is likely to reflect positively on its revenue performance. The improved top-line trajectory is expected to favor CDW’s stock movement.CDW Gains From Buyout Strategies Amid Macro HeadwindsCDW continues to focus on strategic acquisitions to boost its organic growth. In June 2023, the company invested to buy Enquizit, which specializes in providing AWS cloud services. The initiative boosts CDW’s Public Sector Cloud Services, helping accelerate cloud strategies. It complements CDW’s Digital Velocity practice with services like application modernization, cloud transformation and cybersecurity. In February 2023, it acquired Locus Recruiting LLC to improve its services capabilities and knowledge in consulting. In December 2021, it purchased Sirius Computer Solutions from Clayton, Dubilier & Rice. This move strengthened CDW’s capabilities in managed services and expanded its offerings in key growth areas like hybrid infrastructure, digital and data innovation, security, and cloud services. Other notable acquisitions include Focal Point Data Risk and Amplified IT in 2021, IGNW in 2020, and Aptris and Scalar Decisions in 2019.However, declining IT spending due to economic uncertainty and rising competition from major tech companies continue to pose challenges for CDW. In the last reported quarter, CDW’s revenues dipped 2% year over year to $5.517 billion, missing the consensus mark by 3.5%. The downside is driven by a tough economic environment, causing slower customer decisions on tech spending and weaker sales in the Corporate and Public sectors.Vernon Hills, IL-based CDW is a leading provider of integrated information technology (IT) solutions. It offers discrete hardware and software products to integrated IT solutions businesses such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. The company operates under four heads: Corporate, Small Business, Public and Other.CDW’s Zacks Rank and Stock Price PerformanceCDW currently carries a Zacks Rank #4 (Sell). Following the announcement, CDW’s shares gained 2.7% and closed trading at $180.62 on Dec. 3. Shares of the company have lost 15.1% in the past year against the sub-industry’s growth of 21.4%.Image Source: Zacks Investment ResearchStocks to ConsiderSome better-ranked stocks from the broader technology space are InterDigital, Inc. IDCC, Plexus Corp., Inc. PLXS and Workday Inc. WDAY. IDCC & PLXS presently sport a Zacks Rank #1 (Strong Buy) each, while WDAY carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. It has a long-term growth expectation of 17.44%Plexus is a leading provider of electronic contract manufacturing services to OEMs in a wide range of industries, including Healthcare/Life Sciences, Industrial and Aerospace/Defense market sectors. In the last reported quarter, PLXS delivered an earnings surprise of 20.92%.WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support. In the last reported quarter, it delivered an earnings surprise of 7.36%.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. 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