Big data refers to large and diverse collections of data that cannot be managed by traditional data processing tools. Although the need to manage large data sets goes back to the 1960s and 1970s, it was around 2005 when open-source frameworks were created to store and analyze big data sets. Then, the Internet of Things (IoT) enabled gathering more data on product performance and customer usage patterns with more devices connected to the Internet. With the current expansion of generative AI and cloud computing enterprise use, big data continues to grow.
According to a report by Research and Markets, the big data market is projected to grow from $220.2 billion in 2023 to $401.2 billion by 2028, at a compound annual growth rate of 12.7% during the forecast period. Region-wise, North America holds the largest market share, driven by early adoption of big data solutions, a mature IT infrastructure, and a strong focus on innovation. Simultaneously, Asia Pacific serves as the fastest-growing segment in the market as a result of rapid digitization, proactive government support for technological advancements, and growing internet connectivity.
Big data offers numerous benefits such as enhancing predictive capabilities, better insights, strategic decision-making, personalized customer experiences, and improved operational efficiency. The use cases for big data are diverse spanning various industries including retail and ecommerce, healthcare, financial services, manufacturing, as well as government and public services. For instance, the e-commerce giant Amazon utilizes big data gathered from customers to fine-tune its recommendation engine to recommend products to customers who tend to feel overwhelmed by the variety of choices available to them in the modern era. Such suggestions tend to drive impulsive purchases.
Simultaneously, the biotech leader AstraZeneca has unlocked the potential of data and AI-driven drug discovery and development. The firm claimed to hold a vast trove of oncology data from numerous consenting patients, including clinical, imaging, and multi-omics data. This data is fed by the firm’s Oncology Data Science team into a system that uses AI and other statistical tools to generate novel hypotheses in oncology drug development. Other than data from its clinical trials, the firm also collaborates with external companies to leverage real-world data that represents patients from across the globe.
With that being said, let’s move to the 12 best big data stocks to buy according to hedge funds.
Our Methodology:
In order to compile a list of the 12 best big data stocks to buy according to hedge funds, we went through relevant ETFs and media reports to make a list of big data stocks. Moving on, we shortlisted the top 12 stocks from our list which had the highest number of hedge fund holders. The 12 best big data stocks to buy according to hedge funds have been arranged in ascending order of their hedge fund holders, as of Q3.
At Insider Monkey we are obsessed with 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).
12 Best Big Data Stocks To Buy According to Hedge Funds
12. Teradata Corporation (NYSE:TDC)
Number of Hedge Fund Holders: 25
Teradata Corporation (NYSE:TDC) is a software company that provides cloud database and analytics-related software, products, and services. The company enables more confident decision-making, fosters faster innovation, and drives impactful business results for organizations.
Teradata offers the best in class and the most complete cloud analytics and data platform. The firm is trusted by the world’s largest enterprises globally across industries including airlines, banks, telecommunication companies, and courier services companies, among others. Teradata Corporation (NYSE:TDC) successfully grew its cloud business in the third quarter. Public cloud ARR increased to $570 million from $454 million, up 26% year-over-year. Additionally, the firm has realigned its sales function to optimize operations and now manages its business under two segments, which are also its new operating segments, Product Sales and Consulting Services. Simultaneously, Teradata remains on track to reduce operating expenses by approximately $75 million to $80 million on an annualized run rate.
With customers around the world trusting Teradata with their most sensitive data, Teradata Corporation (NYSE:TDC) is a promising big data stock that enables unlocking the power of big data. As of Q3, the stock is held by 25 hedge funds.
11. SAP SE (NYSE:SAP)
Number of Hedge Fund Holders: 36
SAP SE (NYSE:SAP) is a provider of enterprise application software and software-related services. The firm has grown from a small, five-person endeavor founded in 1972 to a multinational business. SAP is headquartered in Walldorf, Germany.
SAP serves as a market share leader in enterprise applications software, enterprise resource management applications, supply chain management applications, procurement applications software, travel and expense management software, and ERP software. The firm stands at the nexus of business and technology and has the vision of bringing out the best in every business and so, organizations have trusted SAP for more than 50 years. SAP SE (NYSE:SAP) is also a top cloud vendor with the largest cloud portfolio with more than 100 solutions for all lines of business (LoB) as well as software suites. There are more than 300 million subscribers in the company’s cloud user base.
SAP SE (NYSE:SAP) continued its strong business momentum through the third quarter. The current cloud backlog grew by 25% to €15.38 billion. Cloud revenue was up 25% to €4.35 billion, driven by the growth in Cloud ERP Suite revenue. The firm is carrying out its 2024 Transformation Program by increasing its focus on key strategic growth areas, in particular business AI. SAP is executing a firm-wide restructuring program to ensure that the firm’s skill set and resources continue to meet future business needs. The restructuring program is expected to affect 9,000 to 10,000 positions and end in early 2025.
While traditional business models tend to decentralize data management with every business function storing its own operational data in a separate database, SAP software comes to the rescue by centralizing data management and allowing access to real-time insights across the enterprise. The firm ranks on our list of the best big data stocks to invest in according to hedge funds.
