We recently compiled a list of the 11 AI News You Should Not Miss. In this article, we are going to take a look at where Elastic N.V. (NYSE:ESTC) stands against the other AI stocks.
Reviewing Rising AI and Security Trends
Cloudflare recently released its fifth annual Year in Review report which highlights trends in internet usage and security, with a focus on AI advancements. Codeium, Claude, and CoPilot entered the top ten most popular generative AI services, while OpenAI maintained its lead. The report also revealed an increase in malicious traffic, with 6.5% of global traffic flagged as potentially harmful. AI bots, like Bytespider and ClaudeBot, were identified as some of the most active, although their traffic slightly decreased over the year.
Other key findings include a rise in government-directed internet shutdowns, with over half of global outages linked to these actions, and the Gaming and Gambling industries becoming the most targeted by cyberattacks.
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The Impact of AI on Investment Strategies and Market Trends
In a CNBC interview, Angie Newman of UBS Private Wealth Management discussed the challenges posed by geopolitical uncertainty and changing interest rates, emphasizing that stocks and bonds often become more correlated during such times. To hedge against this, she recommended diversifying into alternative assets with low correlation to traditional investments, such as gold and private equity.
She highlighted sectors within private equity, including real estate and data centers, as strong performers, especially with the rise of AI. Regarding AI, Newman noted the importance of diversifying portfolios by considering both tech giants and second and third-tier beneficiaries, such as companies benefiting from AI integration, including those with healthy P/Es and dividends. AI, she believes, will be a key driver of equity returns across various sectors.
Navigating Data Complexity in the AI Era
On December 10, NetApp released a report that stressed the importance of investing in unified data strategies and highlighted the growing need for security and sustainability as AI use expands. The Data Complexity Report highlighted the challenges and opportunities of managing data for AI as organizations move from experimenting with AI to scaling its use.
Key findings include the need for significant investment in AI and data unification, which 79% of tech executives see as crucial for success. Security concerns are rising, with 41% predicting more threats in 2025, especially in AI-leading nations. Sustainability remains a focus, though its importance has slightly declined. The report emphasized that secure, unified, and sustainable data strategies are essential for leveraging AI’s transformative potential while maintaining resilience and innovation.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
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).
A group of software engineers working in an open, futuristic office.
Elastic N.V. (NYSE:ESTC)
Number of Hedge Fund Holders: 47
Elastic N.V. (NYSE:ESTC) is an AI-focused search company offering cloud-based solutions, including data search, analysis, and visualization tools. Its products integrate AI with search engines, log analysis, application monitoring, and security to help businesses manage structured and unstructured data across hybrid and multi-cloud environments.
Elastic (NYSE:ESTC) introduced Elastic Rerank on December 10, a cross-encoder reranking model powered by AI, improving text search with semantic capabilities without requiring reindexing. The model integrates into the Elasticsearch Open Inference API, enabling developers to boost keyword search accuracy by adjusting query parameters. Built on the DeBERTa v3 architecture, Elastic Rerank delivers high performance and efficiency, achieving up to 90% improvement in question-answering tasks and a 40% uplift across various retrieval tasks.
Overall, ESTC ranks 6th on our list of AI news you should not miss. While we acknowledge the potential of ESTC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ESTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.