The global IT services market is experiencing significant growth and is on track to grow at a compound annual growth rate of 9.5% from 2024 to 2030, as estimated by Grand View Research. This expansion is particularly pronounced in developing economies such as India and China, driven by the increasing adoption of cloud computing and advanced digital technologies.
Growth in this industry is driven by several factors, including increasingly stringent data privacy regulations and heightened concerns over cybersecurity, compelling enterprises to invest heavily in robust IT solutions. The widespread adoption of advanced technologies such as artificial intelligence, machine learning, and the Internet of Things has further fueled market demand. As businesses across various industries embrace digital transformation, they are turning to IT service providers to meet their evolving needs. The shift towards remote and hybrid work models has necessitated robust IT infrastructure to ensure seamless operations, especially for large enterprises. Cloud computing has emerged as a key driver of market growth, enabling businesses to migrate their critical operations to the cloud and leverage IT services to securely manage these environments. Additionally, the increasing adoption of software-as-a-service models has led to a surge in IT expenditures, as organizations seek to streamline their business processes and focus on core competencies.
Is The Tech Sector Still Booming?
On November 13, Keith Lerner, Co-Chief Investment Officer at Truist Wealth, and Mark Malek, Chief Investment Officer at Siebert Financial, appeared on CNBC and highlighted their outlook for the tech sector outlook.
Lerner expressed a continued preference for technology stocks, particularly those involved in software development. He noted that software companies are increasingly automating processes and driving efficiency across various sectors. This trend positions them well for future growth, even if there are short-term fluctuations in the market. Lerner highlighted that despite any potential pullback due to rising yields or inflation concerns, he views software stocks as having strong leadership potential.
Malek concurred with Lerner’s positive outlook on technology but emphasized a selective investment approach within this sector. He pointed out that ongoing supply chain issues are affecting the chip industry, which could impact performance in certain areas of technology. However, he maintained that significant opportunities exist within the AI ecosystem and other technology-related fields.
As the global IT services market continues to expand at an impressive pace, driven by technological advancements and increasing digital adoption, information technology stocks may be well-positioned to go higher. Given this context, we’re here with a list of 10 high growth IT stocks to invest in now.
Our Methodology
We used Finviz to compile an initial list of IT stocks with high 5-year compound annual growth rates. From that list, we narrowed our choices to 10 high-growth IT stocks that analysts were the most bullish on. The stocks are ranked in ascending order of analysts’ upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 High Growth IT Stocks To Invest In Now
10. Globant S.A. (NYSE:GLOB)
5 Year Revenue CAGR: 31.62%
Average Upside Potential as of November 14: 3.59%
Globant S.A. (NYSE:GLOB) is an IT and software development company operating globally that provides digital solutions and enterprise technology services. It offers a range of services, including blockchain, cloud technologies, cybersecurity, AI, digital experience, and software engineering. It serves various industries, including media, technology, finance, and healthcare.
The company announced strong financial results for the third quarter of 2024. It reported revenue of $614.67 million, a 12.72% increase year-over-year while earning $1.62 per share. This growth was primarily driven by increased demand for its AI-powered solutions. In the first nine months of 2024, AI-related revenue exceeded $250 million, a 120% increase compared to the same period in the previous year. This surge in AI-related revenue underscores the company’s commitment to leveraging AI to deliver innovative solutions to its clients.
Another reason behind the company’s strong financial performance in this quarter was its expanding client base and geographic reach. It added 21 new clients, which will help it generate over $20 million annually, and 331 clients that will contribute more than $1 million annually. It experienced significant growth in the Middle East and APAC regions, with revenue increasing by 35.3% sequentially and 53.1% year-over-year. While Globant S.A. (NYSE:GLOB) has made significant strides in these regions, it’s important to note that it is still in the early stages of establishing a strong presence, which may require substantial investment and time.
The company expects continued strong performance in the coming quarters, driven by its focus on innovation, customer satisfaction, and strategic expansion.
Baron FinTech Fund stated the following regarding Globant S.A. (NYSE:GLOB) in its Q2 2024 investor letter:
“We trimmed Accenture plc and Globant S.A. (NYSE:GLOB) due to continued weak demand for IT services. Business customers are spending on cost-optimization projects, while discretionary spending on revenue-generating projects remains under pressure. We had expected GenAI excitement to be a more meaningful contributor to demand by now, but GenAI-related projects represent a small portion of revenue, AI infrastructure spending is crowding out software spending, and uncertainty about the impact of GenAI is likely causing delays in client decision-making. We believe most of these issues are temporary and expect growth to eventually improve, but we redeployed the proceeds from these sales into higher conviction ideas.”
9. Fiserv Inc. (NYSE:FI)
5 Year Revenue CAGR: 21.20%
Average Upside Potential as of November 14: 5.14%
Fiserv Inc. (NYSE:FI) provides fintech services to clients across the financial services sector, including banks, thrifts, credit unions, securities broker-dealers, mortgages, insurance, leasing and finance companies, and retailers. Its 3 primary segments; Merchant Acceptance, Financial Technology, and Payments & Networks; provide solutions like merchant acquiring, digital commerce, security, POS systems, digital banking, risk management, consulting, and card processing among others.
One of its main products includes Clover, a popular point-of-sale (POS) system used by many small and medium-sized businesses. Clover has been a key driver for the company’s overall growth. This segment alone reported a 28% year-over-year increase in revenue in Q3 2024, fueled by a 15% annualized payment volume growth. Overall third-quarter revenue grew 5.83% to $4.88 billion.
The company’s focus on product innovation has been instrumental in driving this growth. It launched several new Clover hardware products during the quarter, including the KDS XL, Kiosk, Flex Pocket, and Clover Compact. These new offerings cater to a wider range of merchant needs, from large restaurants to small businesses.
Clover’s geographic expansion has also been impressive. The segment expanded its footprint in Latin America and Asia Pacific, with successful pilots in Brazil, Mexico, and Australia. This international expansion has opened up new markets and growth opportunities for Clover. As Fiserv Inc. (NYSE:FI) continues to invest in Clover and expand its capabilities, the company is well-positioned for sustained growth and success in the future.
The London Company Large Cap Strategy stated the following regarding Fiserv, Inc. (NYSE:FI) in its Q3 2024 investor letter:
“Fiserv, Inc. (NYSE:FI) – Fl delivered another strong quarter with both Merchant and Financial Solutions segments outperforming, driven by solid execution of company initiatives. Their product offerings continue to resonate in the market, and management is effectively leveraging å flexible go-to-market strategy by cross-selling core platforms and point solutions to increase customer share across both segments. Free cash flow generation remains strong with management prioritizing organic reinvestment and capital returns. We are confident in Fl’s ability to generate sustainable earnings growth through its robust product portfolio and disciplined capital allocation.”
8. EPAM Systems Inc. (NYSE:EPAM)
5 Year Revenue CAGR: 16.44%
Average Upside Potential as of November 14: 5.52%
EPAM Systems Inc. (NYSE:EPAM) specializes in software engineering services, digital platform engineering, and digital product design, operating out of Newtown, Pennsylvania. EPAM is a founding member of the MACH Alliance. It offers a range of services including infrastructure management, operations, consulting, and digital design, and serves clients across various industries, including finance, travel, technology, and healthcare.
The company is actively investing in AI-driven solutions and capabilities to drive growth and innovation. Its three-pronged AI strategy includes internal transformation, client-focused solutions, and a robust partner ecosystem. Internally, it is investing in its workforce through AI-powered training and up-skilling programs to enhance efficiency and productivity. For its clients, it’s developing and deploying AI-powered solutions, such as EPAM DIAL, EPAM AI/Run, and EPAM EliteA, to address specific business needs. Additionally, EPAM Systems Inc. (NYSE:EPAM) is collaborating with key technology partners to accelerate AI adoption and deliver innovative solutions.
It has seen significant traction in AI-related projects, including the development of large-scale AI ecosystems and AI factories, the implementation of AI-driven transformation programs, and the creation of AI-powered tools like StatGPT. StatGPT, in particular, is a platform that leverages AI to access and analyze economic data using natural language queries.
The company’s third-quarter revenue for 2024 was up 1.34% as compared to the year-ago period and amounted to $1.17 billion. By investing in AI and leveraging its strong global delivery capabilities and deep industry expertise, EPAM Systems Inc. (NYSE:EPAM) is well-positioned to capitalize on the growing demand for AI-driven solutions.
White Falcon Capital Management stated the following regarding EPAM Systems, Inc. (NYSE:EPAM) in its Q3 2024 investor letter:
“IT services companies – Endava and EPAM Systems, Inc. (NYSE:EPAM) – have been the main detractors for our portfolio this year. Admittedly, we have been early. However, we have checked and rechecked our work and believe these businesses are nearing their bottom. In the appendix to this letter, we outline our investment thesis for Endava and explain why we think it deserves to be our top position in the portfolio. We believe Endava (and EPAM) present a compelling opportunity due to their (1) solid position in the growing IT services sector, particularly in digital transformation and AI implementation, (2) overall business quality and founder led management teams, and (3) cheap valuation where we believe they are trading for a trough multiple of trough earnings. Despite recent revenue challenges, these businesses have maintained positive free cash flow. In fact, EPAM has been on the offensive and used its cash reserves to make four acquisitions in the last 12 months taking advantage of the weak IT spending environment. With improving IT spending and a strong management team Endava and EPAM are well-positioned for recovery and long-term growth.”
7. GDS Holdings Ltd. (NASDAQ:GDS)
5 Year Revenue CAGR: 24.86%
Average Upside Potential as of November 14: 12.12%
GDS Holdings Ltd. (NASDAQ:GDS) provides information technology and data center services and offers colocation, consulting, and managed services to its customers. It’s a leading data center operator in China. The company provides colocation, managed hosting, cloud, and consulting services to a range of clients, including cloud service providers, internet companies, financial institutions, and telecommunications companies.
The increasing adoption of AI is driving demand for data center capacity, and this company is well-positioned to capitalize on this trend. Its ability to deliver data centers in record time and its strong operational capabilities are key differentiators in the market. Its strong financial performance is heavily influenced by the successful execution of its international expansion strategy.
Its international business is experiencing strong demand, particularly in Southeast Asia. GDS International, a subsidiary of GDS Holdings Ltd. (NASDAQ:GDS), has very recently secured a significant investment of $1 billion from renowned investors, including Coatue Management and The Baupost Group. This investment will fuel the expansion of GDS International’s data center capacity in key markets across Asia Pacific, including Hong Kong, Singapore, Malaysia, Indonesia, and Japan.
With this investment, GDS International aims to capitalize on the growing demand for data center infrastructure driven by the increasing adoption of AI and cloud technologies. The company’s strategic focus on emerging markets and its strong track record of delivering high-quality data center solutions position it well to benefit from these trends.
Baron Opportunity Fund stated the following regarding GDS Holdings Limited (NASDAQ:GDS) in its Q3 2024 investor letter:
“In the most recent quarter, we re-initiated a position in GDS Holdings Limited (NASDAQ:GDS). GDS is a pan-Asia data center operator with 1.5 gigawatts of power capacity across approximately 100 data centers in and around “tier one” cities in mainland China (GDS Holdings or GDSH), as well as 1.0 gigawatts of power capacity in its rapidly growing Asia ex-China business (GDS International or GDSI). GDS develops and leases data center space (on a power reservation basis) to the top global technology companies such as Alibaba, Tecent, ByteDance, Microsoft, Google, and Oracle under long-term, contracted arrangements. We recently met with CEO/founder William Huang and CFO Daniel Newman in our offices and believe the best days for the company are ahead of it due to durable secular tailwinds in cloud adoption (early innings in Asia, which are lagging the U.S. and rest of the world), continued growth in data, increasing demand from AI applications, and global constraints on power availability yielding sustained pricing power in light of low available supply amid continued strong demand. On a sum-of-the-parts basis, we see a path for the business to be worth $45 to $55 per share in two to three years versus approximately $20 at recent market price. For GDSI, based largely on contracted customer commitments, we see cash flow growing from less than $50 million today to over $500 million over the next three years, with the opportunity to ramp towards $1 billion a few years after that. We value GDSI at $15 per share over the near term and $25 per share over the next four to five years. Regarding GDSH, we believe the mainland China data center business is at the doorstep of a growth inflection and see cash flow growing from about $700 million today to $1 billion over the next three years based on lease-up of its available power capacity. We value GDSH at $30 to $40 per share over the near term and remain encouraged that there will be several catalysts to further enhance value (including a structure to place certain stabilized data center assets into a listed REIT vehicle).”
6. Innodata Inc. (NASDAQ:INOD)
5 Year Revenue CAGR: 19.59%
Average Upside Potential as of November 14: 17.43%
Innodata Inc. (NASDAQ:INOD) provides business process, technology, and consulting services. It also provides products that aim to help clients create, manage, use, and distribute digital information. It’s a global data engineering company specializing in AI data preparation, data engineering support services, medical record transformation, and marketing communications. It serves a range of industries including banking, insurance, finance, technology, and media.
The company’s third quarter was marked by significant growth, driven by increased demand for AI-related services. It generated $30.6 million in revenue from a single Big Tech customer, exceeding initial projections of $27.6 million per quarter, due to the company’s ability to provide critical data engineering services, particularly in the realm of GenAI. The overall revenue for Q3 totaled $52.22 million.
It’s focused on supporting Big Tech companies in developing cutting-edge GenAI models. This involves providing high-quality data, including supervised fine-tuning data and pre-training data. The company is also addressing the growing challenges of data privacy and model quality, particularly as AI models become more sophisticated.
In addition to Big Tech partnerships, Innodata Inc. (NASDAQ:INOD) is expanding its enterprise services to help businesses adopt GenAI. This includes providing consulting, AI services, and digital services to enable businesses to leverage AI-powered solutions. It’s also developing B2B industry applications and enterprise platforms, such as Agility, to address specific niche use cases. Its strong financial performance, coupled with its strategic focus on AI, positions the company for continued growth and success.
5. Cooper-Standard Holdings Inc. (NYSE:CPS)
5 Year Revenue CAGR: 17.07%
Average Upside Potential as of November 14: 23.00%
Cooper-Standard Holdings Inc. (NYSE:CPS) is a leading global supplier of systems and components for sealing and fluid handling solutions supporting diverse transportation and industrial markets. Its products are used in passenger vehicles and light trucks worldwide.
Safety remains a top priority for this company. In the third quarter of 2024, it reported its best-ever safety performance with a total incident rate of 0.20, well below the industry standard of 0.47. Additionally, 29 of its plants maintained a perfect safety record.
On the financial front, the company generated $685.35 million in quarterly revenue for Q3 2024. However, this was down by 6.89%, as compared to the year-ago period. This decline is mainly attributed to challenges like lower production volumes and unfavorable foreign exchange rates. Cooper-Standard Holdings Inc. (NYSE:CPS) is now working further on cost-saving measures, including lean initiatives and restructuring efforts.
It secured $44 million in new business awards in Q3, showcasing its innovative capabilities and strong market position. This significant achievement highlights the company’s ability to adapt to the evolving automotive industry and deliver cutting-edge solutions, positioning it for success in its industry.
4. VNET Group Inc. (NASDAQ:VNET)
5 Year Revenue CAGR: 16.80%
Average Upside Potential as of November 14: 45.55%
VNET Group Inc. (NASDAQ:VNET) is an Internet and data center service provider in China specializing in hosting and related services. It offers a range of services including managed hosting, cloud services, VPN services, and server administration. These services cater to various industries such as IT, communications, gaming, e-commerce, finance, and government.
Its strong financial performance is driven by the increasing demand for AI-powered solutions. Its wholesale business, particularly its hyperscale data centers, has been a key beneficiary of the AI boom. The company has secured substantial orders totaling 235 megawatts, primarily for AI deployment, as of the quarter ending August 27. To capitalize on this growing trend, the company is investing in AI computing power, expanding its AI-related business, and deepening its understanding of customer AI needs. Its Ulanqab IDC campus, a state-of-the-art facility, is specifically designed to support large language model training, catering to customers in the internet, autonomous driving, and financial services sectors.
VNET Group Inc. (NASDAQ:VNET) is also implementing innovative technologies, such as advanced power modules and liquid cooling solutions, to meet the demanding requirements of AI workloads. The company’s extensive network of data centers, particularly in the Greater Beijing Area, is well-positioned to serve the rising AI demand.
3. Clarivate (NYSE:CLVT)
5 Year Revenue CAGR: 21.72%
Average Upside Potential as of November 14: 45.58%
Clarivate (NYSE:CLVT) is a leading global provider of transformative intelligence. It offers a range of solutions across 3 segments: Academia & Government, Life Sciences & Healthcare, and Intellectual Property. Its products support academic research, intellectual property management, drug discovery, and regulatory compliance. It serves a diverse client base, including corporations, universities, law firms, government agencies, and other professional services organizations.
The company recently announced disappointing financial results for the third quarter of 2024. The company’s revenue declined by 3.86% to $622.20 million, primarily due to a significant decrease in transactional and other revenue. This reliance on transactional revenue has proven to be a major weakness, as it is highly susceptible to market fluctuations and economic downturns.
To address this issue, the company has outlined a comprehensive value-creation plan. This plan focuses on several key areas, such as shifting the focus to recurring revenue and prioritizing subscription-based models, which provide more predictable and stable revenue streams and reduce the reliance on volatile transactional revenue.
Additionally, the company will invest in its sales team and improve sales strategies to boost sales and customer retention. This includes better territory alignment, improved incentive plans, and enhanced customer engagement. Clarivate (NYSE:CLVT) will also be accelerating product innovation to introduce products and services that meet evolving customer needs.
As the company aims to improve its financial performance, increase revenue, and enhance profitability, it’s confident that these initiatives will position it for long-term success.
Cove Street Capital Small Cap Value Fund stated the following regarding Clarivate Plc (NYSE:CLVT) in its Q2 2024 investor letter:
“We also added a position in Clarivate Plc (NYSE:CLVT), a data services provider that operates across academic research, intellectual property, and life sciences. We came to the investment from cross-work in another holding, Research Solutions (ticker: RSSS). Ultimately this company sucks in data from participants in the industry, aggregates it, and provides value added services and tools back to those industry participants. The power is in providing customers access to the aggregate. This was a private equity roll-up of a bunch of different data assets that paid too little attention to product innovation, leading to a period of stagnating growth and repeatedly missing guidance. The business of selling many tools and services on a pile of fixed cost assets (data) remains tremendous as can be seen by Clarivate’s mid-to-high 30% EBITDA margins and strong returns on invested capital. With new management and board members in place and 18 months of an “investment cycle” under their belt, we view the risk/reward of CLVT to be favorable at these levels, with a strong upside case if they can reinvigorate growth to their target levels.”
2. Data Storage Corp. (NASDAQ:DTST)
5 Year Revenue CAGR: 25.23%
Average Upside Potential as of November 14: 121.14%
Data Storage Corp. (NASDAQ:DTST) is a leading provider of fully managed cloud hosting, disaster recovery, cybersecurity, IT automation, and voice & data solutions. It offers a comprehensive suite of multi-cloud IT solutions, including robust cybersecurity measures. It also provides data protection and recovery solutions. With a focus on industries like healthcare, financial services, manufacturing, and more, it empowers businesses to effectively manage and protect their critical data.
It announced its financial results for the third quarter of 2024, highlighting significant progress in its strategic initiatives. The company achieved profitability for both the quarter and the nine months leading to it, driven by a focus on high-margin recurring subscription revenue. While the revenue of $5.81 million was lower than Street estimates and also 2.97% lower than Q3 in 2023, there was an 8.7% increase in gross profit.
The company expanded its partnership with a major insurance firm to enhance its cloud infrastructure and cybersecurity capabilities. Additionally, it secured contracts with a leading medical center for compliant cloud hosting and a music publishing organization. To better serve its growing US customer base, it opened a new data center in Chicago. The company also expanded its global footprint by entering the UK market through the integration of Flagship Solutions and the appointment of Colin Freeman as Managing Director of UK Cloud Host Technologies Ltd., positioning it for accelerated growth in Europe.
With a strong financial position of approximately $11.9 million in cash and marketable securities and no long-term debt, Data Storage Corp. (NASDAQ:DTST) is well-positioned to capitalize on future growth opportunities. The company’s management expressed satisfaction with the progress made and reiterated its commitment to driving growth, enhancing profitability, and delivering value to shareholders.
1. FiscalNote Holdings Inc. (NYSE:NOTE)
5 Year Revenue CAGR: 18.53%
Average Upside Potential as of November 14: 282.26%
FiscalNote Holdings Inc. (NYSE:NOTE) is a technology company that leverages AI, machine learning, and analytics to provide public policy and issues management solutions. Its products help businesses, government agencies, and other organizations track, analyze, and respond to policy changes.
The company delivered yet another impressive quarter and logged a revenue of $29.44 million in Q3 2024. While this revenue dropped by 13.44% as compared to the third quarter in 2023, it was $436,500 higher than Street estimates. This performance was driven by a loyal customer base and recurring revenue streams.
It’s dedicated to enhancing its product strategy and leadership team. This commitment is evident in the recent appointment of Can Babaoglu as Chief Product Officer. Babaoglu’s role is crucial in driving product innovation, optimizing existing offerings, and launching new products that cater to evolving customer needs. By strengthening its leadership team, FiscalNote Holdings Inc. (NYSE:NOTE) aims to solidify its position as a leading provider of AI-powered policy and global intelligence solutions.
The company is well-positioned for continued growth and profitability in the remainder of 2024 and beyond. It remains committed to improving operational efficiency, enhancing the customer experience, and driving shareholder value.
As we acknowledge the growth potential of FiscalNote Holdings Inc. (NYSE:NOTE), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NOTE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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