Investors looking for growth but concerned about slower U.S. earnings should look to the cloud, where lesser known names like Pure Storage Inc. (PSTG), NetApp Inc. (NTAP), VMware Inc. (VMW) and Nutanix Inc. (NTNX) have better than average Street recommendations. Compared to the big giants Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT), these smaller cloud companies are set to outperform amid the year’s stalling bull market, with increasing numbers of businesses turning to cloud computing for their software-storage and network solutions, according to Barron’s.

A Growing Cloud

A continually evolving cloud-computing environment has been a boon for cloud storage equipment and software providers with revenues growing at double-digit rates. The exponential growth of data generation is only going to provide further support for such revenue growth. But in order to take full advantage of the growing cloud market, companies will have to devise smart strategies that put them ahead of the competition.

As far as NetApp’s strategy goes, Stifel analyst Matthew Sheerin thinks it is “positioned for growth across all platforms.” The company’s ONTAP software platform is used in both public and private cloud settings, enabling growth in both of those markets. Sheerin has a $91 price target on NetApp’s stock, implying a 45% upside from Thursday’s close.

In comparison, Pure Storage primarily operates in the private cloud space. Normally, that lack of diversity would be detrimental considering that Amazon Web Services (AWS) announced late last month that it would be bringing its cloud expertise into private cloud networks, or what is also known as the “on-premise” facility market. However, Pure Storage is not just making moves to begin offering services in the public cloud, but they are doing it in partnership with AWS, according to Barron’s.

Along with VMware and Nutanix, Veeva Systems Inc. (VEEV), Attunity Ltd. (ATTU), and Apptio Inc. (APTI) are three other cloud companies that look set to thrive. Veeva has a 5-year annual expected earnings growth rate of 25.32%, while Attunity is expected to grow at 20% a year and Apptio expected at 50% a year over the same time period, according to Yahoo! Finance.

Looking Ahead

Over the long term these cloud stocks all look well poised to head higher, but it is not unlikely that they could get pulled down with the rest of the cooling tech market over the short term. While investors new to the cloud space may want to pick a basket of high quality cloud stocks, more savvy investors will want to be more choosy, separating out the winners from the losers.