10 Most Promising Mid-Cap Stocks According to Hedge Funds

2. Elastic N.V. (NYSE:ESTC)

Number of Hedge Fund Holders: 58

Market Capitalization as of October 10, 2024: $8.21 Billion

Elastic N.V. (NYSE:ESTC) is a data analytics company based in the Netherlands that ranks on our list of the most promising mid-cap stocks according to hedge funds. The American-Dutch software company offers generative AI solutions, search solutions, and cyber-security solutions. Some of its customers include Dish, Booking.com, T Mobile, Land Rover, and Cisco.

In the fiscal first quarter of 2025, the company increased total revenue by 18.27% and cloud revenue grew by 30%. The company has over 1,370 customers with a contract value of more than $100,000 per annum. The company is also leveraging artificial intelligence to drive growth for its business. More than 1,300 customers use its cloud platform for generative artificial intelligence. Recently, the company announced the general availability of Google Cloud’s Vertex AI on its Open Inference API. Developers can now use Vertex AI’s tools to build production applications on the Elasticsearch vector database.

Elastic N.V. (NYSE:ESTC) believes its unique set of product offerings should be made available across the globe. Last month, the company signed an agreement with Arrow Electronics to increase the distribution of its AI-backed security, observability, and search solutions in the United States and Canada. The general availability of these solutions via Arrow will simplify the process for people willing to work with Elastic.

Currently, more than 50% of the Fortune 500 use the company’s proprietary platform, Elastic Search AI platform. The company’s expansion strategy coupled with its powerful data use cases sets it apart, making it a future market leader.

Artisan Partners’ Artisan Global Discovery Fund stated the following regarding Elastic N.V. (NYSE:ESTC) in its Q2 2024 investor letter:

“During the quarter, we initiated new GardenSM positions in Liberty Formula One, Elastic N.V. (NYSE:ESTC) and Onto Innovation. Elastic is a software company that specializes in search and data analysis solutions. Elastic’s search, observability and security solutions are built on the Elastic Search AI Platform, which thousands of companies use, including more than 50% of the Fortune 500. Customers use the software to gain visibility into their data, reduce mean-time-to-resolution and drive actionable outcomes. We believe the company will benefit from the rise of generative artificial intelligence (AI). It provides a differentiated offering due to the combination of a unique pricing model based on consumption, products that handle numerous data types and volumes, and an open architecture environment that offers generative AI development flexibility.”