We recently compiled a list of the 10 Best Data Storage Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Equinix Inc. (NASDAQ:EQIX) stands against the other data storage stocks.
Data storage involves systematically archiving digital information to ensure its availability and security for future use. This encompasses various methods, including direct attached storage, network attached storage, and cloud-based solutions. The rise of GenAI has significantly impacted the data storage landscape, necessitating new architectures to handle the growing volume and complexity of data generated. Innovations such as cloud storage, SSD technology, and emerging solutions like DNA data storage are shaping the future of data management.
The next-generation data storage market is projected to grow from $65.1 billion in 2024 to $90 billion by 2029, exhibiting a compound annual growth rate of 6.7%, according to MarketsandMarkets. This is attributed to the increasing demand for energy-efficient and compact storage solutions, the rising adoption of NVMe technology in enterprise systems, and the expanding use of 5G technology. North America held the largest share of the market in 2023, accounting for 43.4%, largely due to heightened demand from sectors such as banking, financial services, insurance (BFSI), and healthcare.
High-speed storage solutions enable organizations to process large datasets quickly, which accelerates model training and enhances analytical effectiveness. Real-time data processing is another critical application of next-generation storage. By integrating AI with advanced storage systems, organizations can perform immediate analysis essential for sectors like finance, where fraud detection and predictive maintenance are paramount. Storage Area Networks (SANs) optimize throughput and minimize latency, making them ideal for mission-critical applications.
AI-driven technologies can detect anomalies and potential threats in real-time, providing essential protection against cyber threats as data breaches become more common. Next-generation storage systems also support the growing Internet of Things (IoT) by efficiently managing the vast amounts of data generated by connected devices. Many of these systems also integrate seamlessly with cloud services, allowing businesses to leverage scalable storage options while utilizing AI for improved performance.
As the market adapts to these opportunities, we are here to help you find the 10 best data storage stocks to buy according to hedge funds.
Methodology
We sifted through ETFs, online rankings, and internet lists to compile a list of the top data storage stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 team of IT professionals working on a digital platform, indicating the company’s agile digital services.
Equinix Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix Inc. (NASDAQ:EQIX) is a digital infrastructure company. As the largest pure-play data center REIT in the US, it serves 10,000+ customers, providing critical infrastructure for their data storage, processing, and interconnection needs. It plays a pivotal role in the evolving landscape of data storage and cloud computing, particularly in the context of the AI revolution.
The company’s focus on low-latency access to multiple cloud providers directly supports efficient data storage and processing for AI. It streamlines AI workloads by enabling the rapid transfer of large datasets between on-premises storage, cloud storage, and processing locations.
Its platform’s support for hybrid AI deployments optimizes data storage strategies. Businesses can store data strategically by enabling seamless integration between on-premises and public cloud infrastructure. For instance, less frequently accessed data can be stored cost-effectively on-premises, while leveraging cloud storage for high-performance needs or when data volumes surge.
Its xScale data centers are specifically designed to meet the demanding infrastructure needs of hyperscalers and service providers involved in AI. Equinix Inc. (NASDAQ:EQIX) is playing a vital role in shaping the future of data storage and cloud computing in the AI era.
Baron Real Estate Fund stated the following regarding Equinix, Inc. (NASDAQ:EQIX) in its first quarter 2024 investor letter:
“Following strong relative and absolute performance in 2023, we reduced our position in leading global data center operator, Equinix, Inc. (NASDAQ:EQIX), due to the Fund’s large position size and other compelling new investment ideas that we have been identifying. Equinix continues to be a core position in the Fund, and we remain optimistic about the long-term growth prospects for the company due to its interconnection focus among a highly curated customer ecosystem developed over the past 20-plus years, strong demand and pricing power, favorable supply backdrop, and evolving incremental demand vectors such as AI. We believe Equinix can continue to compound earnings at approximately 10% over the next few years and believe the prospects for strong shareholder returns remain compelling.”
Overall EQIX ranks 3rd on our list of the best data storage stocks to buy according to hedge funds. While we acknowledge the potential of EQIX as an investment, 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 EQIX 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.