In this article, we will take a look at the 10 best data stocks to buy now based on the data of over 860 hedge funds tracked by Insider Monkey. You can skip our detailed analysis of the data industry and go directly to see the 5 Best Data Stocks to Buy Now.
The data industry may be one of the most diverse and complex industries out there, making it hard to clump together all the sectors falling under it. Big data, data science, analytics, and security sectors are only a few areas of the data industry that the population is generally more familiar with, but they are certainly not the only sectors falling under this vast and all-encompassing industry.
Owing to the magnanimity of the data industry itself, it’s no surprise that the industry and its sub-areas are teeming with various unique companies specializing in a plethora of tech-related businesses. Perhaps this is why the industry itself has been one of the largest and most profitable for years, and will likely continue to be the same in the future. To drive the point home, Market Research Future (MRFR) compiled a report on the market size of this industry, through which it revealed that in 2019, the global data analytics market alone brought in $22,998.8 million in revenue, a value that is expected to increase at a CAGR of 28.9% to $132.9 billion in 2026. Big data market size is demonstrating similar patterns, with it being valued at $138.9 billion in 2020 and expected to rise to $229.4 billion by 2025 at a CAGR of 10.6%.
Suffice it to say, the data industry is enormous and is growing larger every year. This has been attributed to the growing use of and need for the internet in general, awareness of the Internet of Things (IoT), and the rising need for more professionals in the industry. A report by Dice Analytics said the demand for data scientists increased by 50% in 2020 across key industries like healthcare, telecommunications, media/entertainment and fintech.
The industry also seems to be gaining more traction in recent years due to new and emerging trends, such as the emergence of self-driving cars and AI-controlled drones. Cloud computing is another new trend in the industry, whereby vast data stores can be accessed immediately and without the use of on-premises equipment. Today, big companies like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB) are defined by their algorithms that make decisions by processing huge datasets.
As millions of people around the world come online and use internet services, the global data of consumers would only grow exponentially in the future, boosting data-based companies and related stocks. That’s why in this article we will discuss some of the best data stocks to buy now. The stocks mentioned in our list were selected based on multiple factors, including hedge fund popularity (based on data of 800+ hedge funds tracked by Insider Monkey), growth potential and analysts’ ratings.
Like the data industry, the hedge fund industry is also going through drastic changes. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Photo by Luke Chesser on Unsplash
So without further ado, here is our list of the best data stocks to buy now.
Best Data Stocks to Buy Now
10. VMWare, Inc. (NYSE: VMW)
Number of Hedge Fund Holders: 25
VMWare, Inc. (VMW) is a company providing software for hybrid and multi-cloud, modern application, networking, security, and digital workspaces both in the US and internationally. The company ranks 10th on our list of the best data stocks to buy now.
In the first quarter, the company’s adjusted EPS came in at $1.76, beating the Street by $0.04.
By the end of the first quarter of 2021, 25 of the 886 hedge funds tracked by Insider Monkey held stakes in VMWare, Inc. (NYSE: VMW). The value of their stakes was $549 million.
Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), VMWare, Inc. (VMW) is one of the best data stocks to buy now.
9. Teradata Corporation (NYSE: TDC)
Number of Hedge Fund Holders: 26
Teradata Corporation (NYSE: TDC) is a hybrid cloud analytics software provider. The company offers software, hardware, and related business support services for the provision of analytics. It is ranked 9th on our list of the best data stocks to buy now.
This April, Stifel analysts raised Teradata Corporation’s (NYSE: TDC) price target from $26 to $45, after commenting that the company is due to benefit from a better spending environment and in support of their focus on a cloud-first model. Teradata Corporation’s (NYSE: TDC) adjusted EPS of $0.69 for the first quarter of this year also managed to beat estimates of $0.48. Teradata Corporation (NYSE: TDC) gained 102.83% in the past 6 months and 109.85% year to date and has a forward PE ratio of 27.59.
By the end of the first quarter of 2021, 26 of the 886 hedge funds tracked by Insider Monkey held stakes in Teradata Corporation (NYSE: TDC). The value of their stakes was $480 million. Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), Teradata Corporation (NYSE: TDC) is one of the best data stocks to buy now.
First Eagle Investment Management, an investment management firm, mentioned Teradata Corporation (NYSE: TDC) in its first-quarter 2021 investor letter. Here’s what they said:
“Leading contributors in the First Eagle Global Fund this quarter included Teradata Corporation. A longstanding participant in the data warehousing space, Teradata has been transitioning its focus from on-premises database management and analytics to the rapidly growing cloud-computing market. Recent company reports suggest this shift is gaining traction, to the benefit of its Teradata’s share price, as the company posted significantly higher annual recurring revenue from its public cloud-based software business relative to a year ago.”
8. New Relic, Inc. (NYSE: NEWR)
Number of Hedge Fund Holders: 27
New Relic, Inc. (NYSE: NEWR) is a software-as-a-service company and provides a platform for the planning and operating of software across the globe. The platform, New Relic One Platform, offers various products for users to analyze telemetry data in their software. The company ranks 8th on our list of the best data stocks to buy now.
In their first-quarter reports, the company revealed an adjusted EPS of $0.15 versus the estimates of $0.03, and a revenue of $162.59 million for the fiscal first quarter. The revenue demonstrated an 11.37% growth year over year. New Relic, Inc. (NYSE: NEWR) also had a gross profit margin of 72.81% and has gained 3.47% in the past 6 months and 13.71% year to date.
By the end of the first quarter of 2021, 27 of the 886 hedge funds tracked by Insider Monkey held stakes in New Relic, Inc. (NYSE: NEWR). The value of their stakes was roughly $1.14 billion.
Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), Teradata Corporation (NYSE: TDC) is one of the best data stocks to buy now.
7. Domo, Inc. (NASDAQ: DOMO)
Number of Hedge Fund Holders: 27
Domo, Inc. (NASDAQ: DOMO) is a company based in the US that operates a cloud-based platform. The platform digitally connects all its users and provides real-time data and insights to them. The company ranks 7th on our list of the best data stocks to buy now.
On June 10th, Domo, Inc. (NASDAQ: DOMO) added an integration for Snowpark, which is data cloud company Snowflake’s new developer experience. The integration makes it easier to use other programming languages and build custom solutions within the Domo, Inc. (NASDAQ: DOMO) platform. UBS also upgraded Domo, Inc. (NASDAQ: DOMO) this March, from Neutral to Buy. The price target was also raised from $40 to $90 because of a foreseeable strong spending environment for cloud data companies in 2021.
By the end of the first quarter of 2021, 27 of the 866 hedge funds tracked by Insider Monkey held stakes in Domo, Inc. (NASDAQ: DOMO). The value of their stakes was roughly $273 million. This is compared to 22 hedge fund holders in the previous quarter, with stakes worth about $282 million.
Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), Domo, Inc. (NASDAQ: DOMO) is one of the best data stocks to buy now.
6. Amazon.com, Inc. (NASDAQ: AMZN)
Amazon.com, Inc. (NASDAQ: AMZN) makes it to our list of the best data stocks to buy now because of AWS, the company’s behemoth Cloud division which is powering platforms of major companies, including Adobe, Airbnb, Autodesk, Bitdefender, Bristol-Myers Squibb, Johnson & Johnson, Kellogg’s, Lamborghini, Lonely Planet, Lyft, Made.com, McDonalds, among several others.
Amazon.com, Inc. (NASDAQ: AMZN) Web Services is set to gain as small and large businesses use the platform’s spectacular powers to process data. AWS is famous for H2O Driverless AI platform for data science, AWS Lake Formation, Amazon S3, Amazon SageMaker and many other tools that are used extensively in data science for advanced projects.
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Disclosure: None. 10 Best Data Stocks to Buy Now is originally published on Insider Monkey.
