Broker: iFAST Research | Report date: 29 October 2026

Excerpt from iFAST report
Report Summary
Focus: First Trust Cloud Computing ETF (NASDAQ: SKYY)

iFAST’s Q&A with First Trust positions SKYY as a targeted satellite holding for investors seeking exposure to the cloud ecosystem beyond the largest technology names. The report carries no formal BUY or SELL call and no price target; the actionable takeaway is portfolio construction rather than a single-stock trade.

  • Ticker: NASDAQ: SKYY — First Trust Cloud Computing ETF (reference price USD 154.550, -3.27% as shown in the report)
  • Action: Targeted satellite allocation alongside a broader technology ETF, not a core replacement
  • Target price: None stated
  • Structure: Passively tracks the ISE CTA Cloud Computing Index; 65 holdings; AUM USD 3.54 billion; total expense ratio 0.60%

Key investment idea

SKYY spans IaaS, PaaS and SaaS, weighting companies by a cloud score (3 points for IaaS, 2 for PaaS, 1 for SaaS, capped at 4.5% per security). This tilts the fund toward infrastructure and platforms rather than becoming a cloud-software portfolio, giving investors access to both hyperscalers and specialised providers.

Growth drivers

  • Beyond AI, demand is supported by continued on-premise-to-cloud migration, cybersecurity, data growth and digital transformation.
  • Gartner forecasts AI-optimised IaaS spending rising 96% in 2026 and 56.5% in 2027, with inference surpassing training spending in 2026.

Hyperscalers versus neoclouds

The report does not frame this as a winner-takes-all contest. Hyperscalers such as Microsoft, Amazon and Alphabet offer scale and integrated ecosystems, while specialised providers compete on specific workloads and high-performance AI infrastructure. SKYY holds both — Microsoft, Alphabet, Amazon, DigitalOcean and CoreWeave were among its larger positions as of 23 October 2026, alongside Oracle, IBM, Arista Networks and Nutanix.

What investors should watch

  • Actual cloud revenue and utilisation, to confirm demand keeps pace with heavy infrastructure capital spending.
  • Methodology differences versus peer cloud ETFs (e.g. WisdomTree, Fidelity, Global X) when selecting exposure.

Above is an excerpt from a report by iFAST. Clients of iFAST can access the full research report from the iFAST research website.