Written by Rebecca Lipman

A shocking 54% of U.S. data traffic came from "the cloud" in 2011. Stacey Higginbotham of Gigaom.com calls this a tipping point, suggesting more traffic will quickly follow.

Technology companies have quickly taken note, predicting the global population of users will soon fall in line. The shift to cloud services on a global scale are expected to change from a 45/55% mix in 2011 to a 54/46% mix.

"This will represent a shift from downloaded and sideloaded content on their devices to streamed content, such as Netflix movies or Pandora," explains Higginbotham.

Networking giant Cisco foresees video compiling 71% of all global streaming media. The company also notes that the top 20% of mobile bandwidth consumers are growing their consumption almost 3 times faster than the top 1%.

Thus far global media users have used the data in "ever-increasing quantities with the average data usage by a smartphone increasing from 92 MB a month in 2011 to 1.2 GB per month in 2016."

Naturally, networking companies are working to stay competitive in this growing market by providing services ahead of demand.

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Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.



Business Section: Investing Ideas
We decided to take a look at wireless communication companies that have an exposure to this trend.

We searched among a universe of wireless communication stocks that have the bullish sentiment of institutional investors and short sellers. Specifically, net institutional buying in the current quarter and decreases in shares shorted month-over month.

Institutions handle large amounts of trades and often have more market research than ordinary investors, so their bullish sentiment is considered a strong vote of confidence. Similarly, short sellers must meet special requirements to trade, and since they make money when a stock drops in price, their actions are typically followed with a close eye.

So, hedge funds and short sellers seem to think these wireless communication stocks are good investments - do you? (Click here to access free, interactive tools to analyze these ideas.)

1. Telephone & Data Systems Inc. (NYSE:TDS): Provides wireless and wireline telecommunications services in the United States. Net institutional purchases in the current quarter at 3.7M shares, which represents about 4.45% of the company's float of 83.06M shares. Shares shorted have decreased from 7.90M to 4.33M over the last month, a decrease which represents about 4.3% of the company's float of 83.06M shares.


2. Leap Wireless International Inc. (Nasdaq:LEAP): Provides digital wireless services under the 'Cricket' brand name in the United States. Net institutional purchases in the current quarter at 4.8M shares, which represents about 9.84% of the company's float of 48.80M shares. Shares shorted have decreased from 12.39M to 9.93M over the last month, a decrease which represents about 5.04% of the company's float of 48.80M shares.

3. Meru Networks, Inc. (Nasdaq:MERU): Engages in the development and marketing of a virtualized wireless LAN solution. Net institutional purchases in the current quarter at 466.0K shares, which represents about 5.15% of the company's float of 9.04M shares. Shares shorted have decreased from 2.74M to 2.19M over the last month, a decrease which represents about 6.08% of the company's float of 9.04M shares.

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Rebecca Lipman does not own any shares of the companies mentioned above. Institutional data sourced from Fidelity, short data from Yahoo! Finance.