In this article, we discuss the 13 best big data stocks to buy now. If you want to skip our detailed analysis of the Big Data industry, you can go directly to the 5 Best Big Data Stocks To Buy Now.
Big Data analytics refers to the specialized techniques and technologies used to extract insights and information from large, diverse data sets. According to Fortune Business Insights, the size of the global Big Data analytics industry is set to expand at a compound annual growth rate (CAGR) of 13.5% from 2022 to reach a size of $745.15 billion by the end of this decade. The size of the industry stood at $271.83 billion in 2022. The healthy growth rate reflects the untapped market potential of the Big Data analytics industry. Meanwhile, according to a study conducted by McKinsey Global Institute, Big Data has the potential to contribute an additional $3 trillion in value annually to the global economy due to its application in seven industries. Such significant numbers establish the importance of the industry and the players operating in it, such as Alphabet Inc. (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA). In addition to the best big data stocks for the long term, investors looking to gain exposure to the Big Data theme can also choose to invest in a Big Data ETF like the Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) and ProShares Big Data Refiners ETF (NYSEARCA:DAT).
Big Data has made tremendous progress in the fields of cybersecurity, finance, healthcare, manufacturing, and retail. Research conducted at MIT has concluded that organizations adopting a data-driven decision-making model are expected to experience a 5% to 6% improvement in productivity and output compared to their competitors. Consequently, 92.2% of companies are increasing their investments in the field of Big Data. Key benefits of Big Data analytics include identifying business trends, determining root causes of problems, optimizing marketing campaigns, real-time fraud detection, and offering personalized recommendations. Experts believe that there will be an increasing demand for data analysts, scientists, and other related professionals as the world is witnessing an ever-increasing influx of data with every passing day. By 2025, the world is expected to have 150 billion gigabytes available for exploration and understanding. This figure reflects a 33 times increase in the volume of data and information available for analysis since 2013 when it stood at 4.4 billion gigabytes. According to Armonk, New York-based technology giant International Business Machines Corporation (NYSE:IBM), the US economy suffers an annual loss of $3.1 trillion due to poor data quality.
Currently, some of the primary sources of Big Data include social media posts, digital transactions, sensor data, weblogs, internet searches, and mobile applications. The global proliferation of Internet of Things (IoT) devices is anticipated to have a significant impact in the field of Big Data as well. Experts predict that there will be 20 billion IoT devices by the end of this decade that will generate and collect massive amounts of data in various forms like telemetry data, audio, video, and more. Big Data is considered the fuel that powers artificial intelligence (AI) and machine learning applications. AI techniques leverage large datasets to "train" algorithms and models to perform tasks like image recognition, natural language processing, and prediction. Additionally, common machine learning methods like deep learning neural networks require substantial volumes of training data to identify meaningful patterns and relationships. As organizations and researchers accumulate larger datasets, the performance of AI systems improves. This reflects the idea that the growth in Big Data analytics will provide impetus to artificial intelligence and machine learning applications as well. A report issued by Fortune Business Insights on the prospects of the AI industry revealed that the industry is set to expand at a CAGR of 21.6% to reach a size of $2.03 trillion by 2030 as opposed to $428 billion in 2022. You can also check out the 20 Best-Funded AI Startups in 2023 here.
We have shortlisted the 13 best Big Data stocks using Insider Monkey’s database of 910 hedge funds. The companies selected have substantial exposure to the Big Data industry through various business operations. The Big Data analytics stocks have been listed in ascending order of the number of hedge funds holding a stake in them as of Q2 2023.
Best Big Data Stocks To Buy Now
13. Splunk Inc. (NASDAQ:SPLK)
Number of Hedge Fund Holders: 50
Value of Hedge Fund Holdings: $1,507,300,100
Market Capitalization: $24.40 billion
Splunk Inc. (NASDAQ:SPLK) is a San Francisco, California-based software company. The company is a provider of Big Data analytics platform used by organizations to collect, index, store, and analyze large amounts of machine-generated data in real-time. Cisco Systems, Inc. (CSCO) announced on September 21 that it intends to acquire Splunk Inc. (NASDAQ:SPLK) for $28 billion to increase the company’s adoption of AI. The deal is expected to be closed by the end of Q3 2024.
12. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 51
Value of Hedge Fund Holdings: $813,934,580
Market Capitalization: $133.44 billion
International Business Machines Corporation (NYSE:IBM) provides a mature integrated environment to store, process, analyze, and apply AI or machine learning on Big Data across hybrid cloud environments. On September 20, Matthew Swanson at RBC Capital initiated coverage on International Business Machines Corporation (NYSE:IBM) stock with an Outperform rating and a target price of $188. The analyst was impressed with the depth of the software platform offered by International Business Machines Corporation (NYSE:IBM).
“New positions initiated in Q4 included shorts International Business Machines Corporation (NYSE:IBM), Acushnet Holdings (GOLF) and elf Beauty (ELF). Since diversified information technology company IBM’s 2019 acquisition of Red Hat, the company has aggressively pursued a hybrid cloud strategy. Though IBM and its new management team have made solid progress on this pivot, we believe the company still meaningfully lags the cloud hyperscalers and other cloud-native companies. Management has also laid out aggressive long-term targets for revenue growth and free cash flow, both of which we believe the company will struggle to achieve as it faces intense competition in its hybrid cloud business and structural headwinds in the company’s legacy businesses.”
11. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 56
Value of Hedge Fund Holdings: $2,124,533,700
Market Capitalization: $200.12 billion
Accenture plc (NYSE:ACN) offers a range of consulting and technology services for Big Data strategy, implementation, and analytics. This includes advising clients on Big Data strategy, architecture, data governance, and program management. Accenture plc (NYSE:ACN) claims that 92% of Big Data users are satisfied with the business outcomes of their initiatives, and 94% of the users believe that the implementation of Big Data initiatives fulfills their requirements.
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology
Accenture plc (NYSE:ACN), a business and IT services consultant, will be instrumental in helping enterprises reinvent and modernize their IT architecture for AI. The company recently announced a $3 billion investment, which includes doubling their data and AI workforce to 80,000 to address this growing opportunity.”
10. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 62
Value of Hedge Fund Holdings: $1,677,475,400
Market Capitalization as of September 25, 2023: $23.78 billion
MongoDB, Inc. (NASDAQ:MDB) is a New York-based company that offers a popular document-oriented NoSQL database that can handle large volumes of unstructured and semi-structured data. It uses a flexible JSON-like document model to store data, making it a good fit for Big Data from diverse sources. MongoDB, Inc. (NASDAQ:MDB) is one of the 20 stocks that the Citi Research team has recommended buying on the pullback with a long-term investment view.
9. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 65
Value of Hedge Fund Holdings: $5,390,003,700
Market Capitalization: $49.37 billion
Snowflake Inc. (NYSE:SNOW) is a Bozeman, Montana-based company that provides a fast, flexible cloud data platform known as the Snowflake Data Cloud to power modern Big Data warehousing and analytics initiatives. The company employs a unique architecture optimized for the cloud that separates storage, computing, and query processing for scalability and performance. According to the Forrester Consulting Total Economic Impact (TEI) study, customers using Snowflake's Data Cloud have experienced an impressive return on investment (ROI) of 616% over three years.
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology.
Snowflake Inc. (NYSE:SNOW), a cloud-based data platform company, is positioned well to help enterprises better leverage their own data to get the most out of AI models. Though it is still early days in terms of adoption, Snowflake saw workloads for data science, machine learning, and AI use cases grow more than 90% year-over-year in its most recent quarter.”
8. VMware, Inc. (NYSE:VMW)
Number of Hedge Fund Holders: 70
Value of Hedge Fund Holdings: $9,018,082,300
Market Capitalization: $72 billion
VMware, Inc. (NYSE:VMW) has developed the VMware Big Data Extensions (BDE), which adds enterprise-grade features to open-source Big Data platforms. The company also provides Virtualized Big Data Management through its virtualization platform vSphere. VMware, Inc. (NYSE:VMW) is expected to be taken over by Broadcom Inc. (NASDAQ:AVGO) for $69 billion by October 30, 2023. Presently, the deal is under review by Chinese regulatory authorities.
7. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holders: 78
Value of Hedge Fund Holdings: $2,421,193,800
Market Capitalization: $28.87 billion
Datadog, Inc. (NASDAQ:DDOG) is a New York-based monitoring and analytics platform for cloud applications that can analyze large volumes of monitoring data from various sources.
On August 18, Andrew Sherman at TD Cowen initiated coverage on Datadog, Inc. (NASDAQ:DDOG) with an Outperform rating and a target price of $120. The analyst highlighted that the entity has “very strong” net new customer additions and adoption of new offerings as well by existing customers.
“Datadog, Inc. (NASDAQ:DDOG): DDOG was a top detractor in the quarter. The company reported strong 4Q results including 44% revenue growth and 30% earnings growth but gave cautious revenue guidance for 2023. Macroeconomic headwinds have caused clients to slow the transition of workloads to the cloud and instead to optimize current capacity. Despite this temporary slowdown, DDOG still expects revenue to grow nearly 25% in 2023.
As businesses have transitioned to cloud software infrastructure, much of which is in isolated data silos, it has become increasingly difficult for data engineers to monitor and analyze system performance. Datadog provides a SaaS software platform to monitor and analyze the system performance of software applications and IT infrastructure by giving users a single page view to observe their company’s technology stack. The company has quickly grown its revenue from $100 million in 2017 to $1.7 billion in 2022 and, we believe, should continue to grow revenue at more than 20% annually as it penetrates its $40 billion and fast-growing market. Less than 10% of software applications are currently monitored. The company’s dollar-based net retention rate has been 130%+ as existing customers continue to use an increasing number of products and the company continues to add new features. As of 4Q22, 81% of customers used 2+ products, while only 18% of customers used 6+ products (up from less than 1% two years ago). As an extremely capex light software business, DDOG already has significant free-cash-flow ($350m in 2022) and free-cash-flow margins (21% in 2022).”
6. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 84
Value of Hedge Fund Holdings: $3,402,004,900
Market Capitalization: $296.72 billion
Oracle Corporation (NYSE:ORCL) has a comprehensive portfolio of products and cloud services for Big Data and analytics. This includes Oracle Big Data Cloud, Oracle Analytics Cloud, and Oracle Exadata Cloud. For data ingestion and processing, Oracle Corporation (NYSE:ORCL) offers support for Hadoop, Spark, Kafka, NoSQL databases, and other Big Data technologies. The company highlights successful collaborations with corporations like Deloitte and Exelon, showing how its Big Data platform assists analytics teams in analyzing data to derive valuable insights.
Here's what Madison Investments said about Oracle Corporation (NYSE:ORCL) in its Q2 2023 investor letter:
“Oracle Corporation (NYSE:ORCL) reported a solid fiscal fourth quarter and provided guidance for the first quarter that continued to support solid growth for the company. Revenues grew 17% and were primarily driven by Cloud Services (up 29%) with Oracle’s cloud infrastructure (OCI) business growing 89% in the quarter. Oracle has messaged that this business has price-performance advantages as compared to the other infrastructure companies (Amazon, Microsoft, Google) and appears to be winning business as a result. On the earnings call, management made the case that OCI will play a significant role in the Generative AI workloads which bodes well for continued growth.”
In addition to Oracle Corporation (NYSE:ORCL), Alphabet Inc. (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA) are also some of the best big data stocks to buy now.
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Disclosure: None. 13 Best Big Data Stocks To Buy Now is originally published on Insider Monkey.