In this article, we will look at the 11 best big data stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Big Data Stocks to Buy Now.
Big Data Industry Analysis
According to a report by Fortune Business Insights, the global big data analytics market reached a value of $240.56 billion in 2021 and is expected to reach a valuation of $271.83 billion in 2022. The market is expected to grow to $655.53 billion by 2029, growing at a compound annual growth rate of 13.4% from 2022 to 2029. Region-wise, North America was the dominant shareholder and accounted for $90.07 billion of the global big data analytics market share in 2021. North America is expected to remain the dominant region over the forecasted period due to hefty investments in AI, machine learning, and IoT.
Businesses worldwide are undergoing a digital transformation. Industry 4.0 encompasses big data analytics, cloud computing, the internet of things, artificial intelligence, and machine learning, among other disruptive technologies that are revolutionizing the way industries operate and are making them ever so efficient. Big data got a chance to show off its true power back in the pandemic days when the entire world was in lockdown mode. Even as businesses resumed physical operations, big data and cloud computing solutions have not seen a drop in demand due to the cost benefits and increased optimization they offer.
Big Data Stocks are Recession Resistant
While growth stocks are taking a beating in 2022 due to rising interest rates that are straining their earnings, and investors are generally steering away from tech, the enterprise software segment which is made up of big data remains on investors’ and analysts’ radars. Truist’s managing director of software and cloud technology, Joel Fishbein, recently appeared on CNBC where he discussed how cloud stocks are “recession resistant” but not “immune” to a recession. Here is what Joel Fishbein said:
“We think that they (cloud stocks) are recession resistant, not that they are immune, but they don’t have any consumer exposure. Also the secular tailwinds in digital transformation, all companies are leveraging technology to increase productivity and eliminate mundane areas of their businesses. So we think that people are doubling down in some instances on cloud technology to improve their businesses in a recessionary environment…”
Some of the major players operating in the big data space include Salesforce, Inc. (NYSE:CRM), Datadog, Inc. (NASDAQ:DDOG), and Microsoft Corporation (NASDAQ:MSFT). These stocks among others are discussed in the article below.
Our Methodology
We reviewed the big data industry and identified the leaders in the industry. We narrowed down our selection to stocks that had positive market sentiment and ranked them according to their popularity among elite hedge funds. The hedge fund sentiment was derived from Insider Monkey’s database which, as of Q2 2022, tracks roughly 900 elite hedge funds.
11 Best Big Data Stocks to Buy Now
11. Workiva Inc. (NYSE:WK)
Number of Hedge Fund Holders: 13
Workiva Inc. (NYSE:WK) operates a cloud-based connected and reporting compliance platform that enables the use of connected data and automation of reporting across finance, accounting, risk, and compliance. At the close of Q2 2022, 13 hedge funds held stakes in Workiva Inc. (NYSE:WK) worth $201.8 million. As of June 30, Praesidium Investment Management Company is the largest shareholder in the company with stakes worth $73.4 million.
On August 9, Workiva Inc. (NYSE:WK) announced earnings for the second quarter of fiscal 2022, in which it beat EPS expectations by $0.09. The company generated a revenue of $131.5 million, up 24.5% year over year, and beat revenue estimates by $5.5 million. Shortly after the company’s earnings release, Baird analyst Rob Oliver raised his price target on Workiva Inc. (NYSE:WK) to $105 from $100 and reiterated a buy-side Outperform rating on the shares.
Wall Street analysts see upside to Workiva Inc. (NYSE:WK). This August, BMO Capital analyst Daniel Jester raised his price target on Workiva Inc. (NYSE:WK) to $82 from $75 and maintained an Outperform rating on the shares. On September 1, Citi analyst Steven Enders started coverage of Workiva Inc. (NYSE:WK) with a Buy rating and a $86 price target.
Here is what Clearbridge Investments had to say about Workiva Inc. (NYSE:WK) in its first-quarter 2022 investor letter:
“We also initiated a new position in Workiva (NYSE:WK) in the IT sector. The company provides cloud-based compliance and regulatory software that allows users to improve the productivity and efficiency of their reporting. It is the industry leader with over 50% market share for its reporting software and is making significant progress in expanding its geographical footprint outside the U.S. Workiva is also working to expand its product offerings into ESG reporting to meet the growing demand from U.S. companies and meet new EU regulations. As such, we see an attractive growth runway as a strong returns compounder over the foreseeable future.”
10. Alteryx, Inc. (NYSE:AYX)
Number of Hedge Fund Holders: 33
Alteryx, Inc. (NYSE:AYX) is a leading software developer that develops products for applications in data science and data analytics. On August 2, Alteryx, Inc. (NYSE:AYX) announced earnings for the second quarter of fiscal 2022 in which it beat EPS consensus by $0.14. The company’s revenue for the quarter amounted to $180.6 million, up 50.4% year over year, and beat Wall Street estimates by $19.68 million. After releasing earnings, Alteryx, Inc. (NYSE:AYX) also announced that for fiscal 2022, the company expects to generate a revenue of up to $780 million, while Wall Street consensus sits at $734 million.
On August 15, Needham analyst Mike Cikos raised his price target on Alteryx, Inc. (NYSE:AYX) to $80 from $68 and maintained a Buy rating on the shares. Over the past 3 months, Alteryx, Inc. (NYSE:AYX) has received 6 Buy ratings and 2 Hold ratings from Wall Street analysts. The stock has a median price target of $82, which implies a 37.5% upside from current levels.
At the end of the second quarter of 2022, 33 hedge funds were long Alteryx, Inc. (NYSE:AYX). These funds held stakes of $708 million in the company. As of June 30, Bares Capital Management owns more than 4.2 million shares of Alteryx, Inc. (NYSE:AYX) and is the top shareholder in the company. The investment covers 7.59% of the fund’s 13F portfolio.
Other big data stocks that have consensus Buy ratings from Wall Street analysts include Salesforce, Inc. (NYSE:CRM), Datadog, Inc. (NASDAQ:DDOG), and Microsoft Corporation (NASDAQ:MSFT).
9. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 40
International Business Machines Corporation (NYSE:IBM) is a computing behemoth that offers industry-leading software for AI-driven data analytics. On September 15, International Business Machines Corporation (NYSE:IBM) announced a strategic collaboration with leading cybersecurity company, Telos Corporation (NASDAQ:TLS) to develop enterprise solutions that will help businesses operationalize and automate activities in compliance with cybersecurity and regulatory standards.
Wall Street is bullish on International Business Machines Corporation (NYSE:IBM). On August 16, Credit Suisse analyst Shannon Cross started coverage of International Business Machines Corporation (NYSE:IBM) with a buy-side Outperform rating and a $163 price target. Cross sees the company benefitting from its position in the $1 trillion hybrid cloud market.
International Business Machines Corporation (NYSE:IBM) is one of the best big data stocks to buy right now and is also one of the few names in the industry that pays a dividend. As of September 28, the stock is offering a forward dividend yield of 5.38% which the company supports with free cash flows of $7.5 billion.
At the close of Q2 2022, 40 hedge funds disclosed ownership of stakes in International Business Machines Corporation (NYSE:IBM). These funds held collective stakes of $948 million in the company. As of June 30, Arrowstreet Capital is the most prominent investor in the company, with stakes worth $372.6 million. The investment accounts for 0.52% of the fund’s 13F portfolio.
8. New Relic, Inc. (NYSE:NEWR)
Number of Hedge Fund Holders: 41
New Relic, Inc. (NYSE:NEWR) is a leading California-based software company that provides cloud-based performance tracking solutions for website and application developers. As of June 30, Eminence Capital is the top shareholder in New Relic, Inc. (NYSE:NEWR) and owns roughly 5.5 million shares of the company. The investment covers 5.54% of Eminence Capital’s 13F portfolio.
On August 4, New Relic, Inc. (NYSE:NEWR) announced earnings for the first quarter of fiscal 2023. The company outperformed EPS estimates by $0.10 and generated a revenue of $216.46 million for the quarter, up 19.9% year over year and ahead of Wall Street estimates by $3.3 million.
On August 8, Baird analyst Rob Oliver raised his price target on New Relic, Inc. (NYSE:NEWR) to $80 from $75 and maintained a buy-side Outperform rating on the shares. On September 23, Credit Suisse analyst Fred Lee started coverage of New Relic, Inc. (NYSE:NEWR) with an Outperform rating and a $78 price target.
Hedge funds are initiating positions in New Relic, Inc. (NYSE:NEWR). At the close of Q2 2022, 41 hedge funds were bullish on New Relic, Inc. (NYSE:NEWR) and held stakes worth $1.20 billion in the company. This is compared to 29 hedge funds in the first quarter of 2022.
In addition to New Relic, Inc. (NYSE:NEWR), hedge funds are bullish on the big data industry and are piling into Salesforce, Inc. (NYSE:CRM), Datadog, Inc. (NASDAQ:DDOG), and Microsoft Corporation (NASDAQ:MSFT).
7. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 55
MongoDB, Inc. (NASDAQ:MDB) provides database products and services for enterprises worldwide. On August 31, the company reported earnings for the second quarter of fiscal 2023. MongoDB, Inc. (NASDAQ:MDB) reported quarterly revenue of $303.6 million, up 52.8% year over year, and ahead of Wall Street expectations by $21.35 million.
Wall Street analysts are bullish on MongoDB, Inc. (NASDAQ:MDB). This September, Stifel analyst Brad Reback revised his price target on MongoDB, Inc. (NASDAQ:MDB) to $320 from $340 and reiterated a Buy rating on the shares. On September 1, Canaccord analyst David Hynes raised his price target on MongoDB, Inc. (NASDAQ:MDB) to $360 from $300 and maintained a Buy rating on the shares.
At the end of the second quarter of 2022, 55 hedge funds disclosed ownership of stakes in MongoDB, Inc. (NASDAQ:MDB). The total value of these stakes amounted to $1.17 billion. As of June 30, Renaissance Technologies owns 0.52 million shares of MongoDB, Inc. (NASDAQ:MDB) and is the largest shareholder in the company. The investment covers 0.15% of Jim Simons’ 13F portfolio.
Here is what Baron Funds had to say about MongoDB, Inc. (NASDAQ:MDB) in its first-quarter 2022 investor letter:
“MongoDB, Inc. is the market leader in modern operational databases, with its differentiated document database model. Shares increased on strong fourth quarter results, with an acceleration across total revenue (up 56%), subscription revenue (up 58%), and Atlas cloud revenue, its database as a service or DBaaS offering, (up 85%), and improved profitability. Customer additions grew more than 30%. More importantly, customer spending was also strong, especially for customers spending above $1 million annually, demonstrating that the expansion aspect of MongoDB’s business strategy is resonating as more companies are standardizing on MongoDB’s application data platform.”
6. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 65
Snowflake Inc. (NYSE:SNOW) is a leading cloud-based big data company that provides data storage and analytics services. On September 22, emerging e-commerce retailer Boxed Inc. (NYSE:BOXD) announced a collaboration with Snowflake Inc. (NYSE:SNOW) by which Snowflake (NYSE:SNOW) will be developing and powering the company’s Spresso software-as-a-service platform.
On August 24, Snowflake Inc. (NYSE:SNOW) announced earnings for the second quarter of fiscal 2023. The company reported earnings per share of $0.01 and outperformed EPS estimates by $0.02. The company’s revenue for the quarter amounted to $497.25 million, up 82.6% year over year, and came in ahead of consensus by $29.9 million.
On September 16, Needham analyst Mike Cikos started coverage of Snowflake Inc. (NYSE:SNOW) with a Buy rating and a $240 price target. This September, MoffettNathanson analyst Sterling Auty started coverage of Snowflake Inc. (NYSE:SNOW) with a Buy rating and a $242 price target. Snowflake Inc. (NYSE:SNOW) has an average price target of $207, which implies a 19.4% upside from its current share price of $174 as of September 28.
Insider Monkey found 65 hedge funds long Snowflake Inc. (NYSE:SNOW) at the end of the second quarter of 2022. These funds held collective stakes of $5.12 billion in the company. As of June 30, Altimeter Capital Management owns more than 17 million shares of Snowflake Inc. (NYSE:SNOW) and is the largest shareholder in the company. The investment covers 54.94% of Altimeter Capital Management’s 13F portfolio.
Here is what Baron Funds had to say about Snowflake Inc. (NYSE:SNOW) in its second-quarter 2022 investor letter:
“During the quarter, we added to three of our cloud infrastructure positions – Snowflake Inc., Cloudflare, Inc., and Datadog, Inc.While investors are concerned that a weakening macroeconomic environment will be a near term headwind to growth as customers may slow down their cloud expansions, we remain focused on the long term – duration of growth, competitive advantages, and innovative capabilities and are happy to increase our positions at a more attractive price. For example, Snowflake, the leading data cloud provider, during its recent user conference, announced several new products, which significantly expand its addressable market…” (Click here to see the full text)
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Disclosure. None. 11 Best Big Data Stocks to Buy Now is originally published on Insider Monkey.
