With market uncertainty and concern over the remaining longevity of the bull market growing, Oppenheimer analyst Timothy Horan recently took a look at risk levels among communication and cloud stocks.

In a new report, Horan discussed which companies could be most exposed if the economy takes a turn for the worse.

Playbook

According to Horan, the maturing cloud industry and relatively solid valuations and balance sheets of many companies in the space will make the next recession a lot less scary than the last recession in 2008.

The first sign of trouble for some companies could be widening high-yield spreads. Current high-yield rates broke 8 percent last week, and 18-month spreads recently hit 6.1 percent – their highest level in three years. Horan noted that widening spreads can be bad news for highly-leveraged companies.

Familiar Names

Horan pointed out…

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