In this article, we will take a look at the 10 best data stocks to buy now based on the data of over 860 hedge funds tracked by Insider Monkey.
The data industry may be one of the most diverse and complex industries out there, making it hard to clump together all the sectors falling under it. Big data, data science, analytics, and security sectors are only a few areas of the data industry that the population is generally more familiar with, but they are certainly not the only sectors falling under this vast and all-encompassing industry.
Owing to the magnanimity of the data industry itself, it’s no surprise that the industry and its sub-areas are teeming with various unique companies specializing in a plethora of tech-related businesses. Perhaps this is why the industry itself has been one of the largest and most profitable for years, and will likely continue to be the same in the future. To drive the point home, Market Research Future (MRFR) compiled a report on the market size of this industry, through which it revealed that in 2019, the global data analytics market alone brought in $22,998.8 million in revenue, a value that is expected to increase at a CAGR of 28.9% to $132.9 billion in 2026. Big data market size is demonstrating similar patterns, with it being valued at $138.9 billion in 2020 and expected to rise to $229.4 billion by 2025 at a CAGR of 10.6%.
Suffice it to say, the data industry is enormous and is growing larger every year. This has been attributed to the growing use of and need for the internet in general, awareness of the Internet of Things (IoT), and the rising need for more professionals in the industry. A report by Dice Analytics said the demand for data scientists increased by 50% in 2020 across key industries like healthcare, telecommunications, media/entertainment and fintech.
The industry also seems to be gaining more traction in recent years due to new and emerging trends, such as the emergence of self-driving cars and AI-controlled drones. Cloud computing is another new trend in the industry, whereby vast data stores can be accessed immediately and without the use of on-premises equipment. Today, big companies like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB) are defined by their algorithms that make decisions by processing huge datasets.
As millions of people around the world come online and use internet services, the global data of consumers would only grow exponentially in the future, boosting data-based companies and related stocks. That’s why in this article we will discuss some of the best data stocks to buy now. The stocks mentioned in our list were selected based on multiple factors, including hedge fund popularity (based on data of 800+ hedge funds tracked by Insider Monkey), growth potential and analysts’ ratings.
Like the data industry, the hedge fund industry is also going through drastic changes. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Photo by Luke Chesser on Unsplash
So without further ado, here is our list of the best data stocks to buy now.
Best Data Stocks to Buy Now
10. VMWare, Inc. (NYSE: VMW)
Number of Hedge Fund Holders: 25
VMWare, Inc. (VMW) is a company providing software for hybrid and multi-cloud, modern application, networking, security, and digital workspaces both in the US and internationally. The company ranks 10th on our list of the best data stocks to buy now.
In the first quarter, the company’s adjusted EPS came in at $1.76, beating the Street by $0.04.
By the end of the first quarter of 2021, 25 of the 886 hedge funds tracked by Insider Monkey held stakes in VMWare, Inc. (NYSE: VMW). The value of their stakes was $549 million.
Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), VMWare, Inc. (VMW) is one of the best data stocks to buy now.
9. Teradata Corporation (NYSE: TDC)
Number of Hedge Fund Holders: 26
Teradata Corporation (NYSE: TDC) is a hybrid cloud analytics software provider. The company offers software, hardware, and related business support services for the provision of analytics. It is ranked 9th on our list of the best data stocks to buy now.
This April, Stifel analysts raised Teradata Corporation’s (NYSE: TDC) price target from $26 to $45, after commenting that the company is due to benefit from a better spending environment and in support of their focus on a cloud-first model. Teradata Corporation’s (NYSE: TDC) adjusted EPS of $0.69 for the first quarter of this year also managed to beat estimates of $0.48. Teradata Corporation (NYSE: TDC) gained 102.83% in the past 6 months and 109.85% year to date and has a forward PE ratio of 27.59.
By the end of the first quarter of 2021, 26 of the 886 hedge funds tracked by Insider Monkey held stakes in Teradata Corporation (NYSE: TDC). The value of their stakes was $480 million. Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), Teradata Corporation (NYSE: TDC) is one of the best data stocks to buy now.
First Eagle Investment Management, an investment management firm, mentioned Teradata Corporation (NYSE: TDC) in its first-quarter 2021 investor letter. Here’s what they said:
“Leading contributors in the First Eagle Global Fund this quarter included Teradata Corporation. A longstanding participant in the data warehousing space, Teradata has been transitioning its focus from on-premises database management and analytics to the rapidly growing cloud-computing market. Recent company reports suggest this shift is gaining traction, to the benefit of its Teradata’s share price, as the company posted significantly higher annual recurring revenue from its public cloud-based software business relative to a year ago.”
8. New Relic, Inc. (NYSE: NEWR)
Number of Hedge Fund Holders: 27
New Relic, Inc. (NYSE: NEWR) is a software-as-a-service company and provides a platform for the planning and operating of software across the globe. The platform, New Relic One Platform, offers various products for users to analyze telemetry data in their software. The company ranks 8th on our list of the best data stocks to buy now.
In their first-quarter reports, the company revealed an adjusted EPS of $0.15 versus the estimates of $0.03, and a revenue of $162.59 million for the fiscal first quarter. The revenue demonstrated an 11.37% growth year over year. New Relic, Inc. (NYSE: NEWR) also had a gross profit margin of 72.81% and has gained 3.47% in the past 6 months and 13.71% year to date.
By the end of the first quarter of 2021, 27 of the 886 hedge funds tracked by Insider Monkey held stakes in New Relic, Inc. (NYSE: NEWR). The value of their stakes was roughly $1.14 billion.
Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), Teradata Corporation (NYSE: TDC) is one of the best data stocks to buy now.
7. Domo, Inc. (NASDAQ: DOMO)
Number of Hedge Fund Holders: 27
Domo, Inc. (NASDAQ: DOMO) is a company based in the US that operates a cloud-based platform. The platform digitally connects all its users and provides real-time data and insights to them. The company ranks 7th on our list of the best data stocks to buy now.
On June 10th, Domo, Inc. (NASDAQ: DOMO) added an integration for Snowpark, which is data cloud company Snowflake’s new developer experience. The integration makes it easier to use other programming languages and build custom solutions within the Domo, Inc. (NASDAQ: DOMO) platform. UBS also upgraded Domo, Inc. (NASDAQ: DOMO) this March, from Neutral to Buy. The price target was also raised from $40 to $90 because of a foreseeable strong spending environment for cloud data companies in 2021.
By the end of the first quarter of 2021, 27 of the 866 hedge funds tracked by Insider Monkey held stakes in Domo, Inc. (NASDAQ: DOMO). The value of their stakes was roughly $273 million. This is compared to 22 hedge fund holders in the previous quarter, with stakes worth about $282 million.
Like Netflix, Inc. (NASDAQ: NFLX), Hulu, Uber Technologies, Inc. (NYSE: UBER), Alphabet, Inc. (NASDAQ: GOOG), Salesforce.com, Inc. (NYSE: CRM), Oracle Corporation (NYSE: ORCL) and Airbnb, Inc. (NASDAQ: ABNB), Domo, Inc. (NASDAQ: DOMO) is one of the best data stocks to buy now.
6. Amazon.com, Inc. (NASDAQ: AMZN)
Amazon.com, Inc. (NASDAQ: AMZN) makes it to our list of the best data stocks to buy now because of AWS, the company’s behemoth Cloud division which is powering platforms of major companies, including Adobe, Airbnb, Autodesk, Bitdefender, Bristol-Myers Squibb, Johnson & Johnson, Kellogg’s, Lamborghini, Lonely Planet, Lyft, Made.com, McDonalds, among several others.
Amazon.com, Inc. (NASDAQ: AMZN) Web Services is set to gain as small and large businesses use the platform’s spectacular powers to process data. AWS is famous for H2O Driverless AI platform for data science, AWS Lake Formation, Amazon S3, Amazon SageMaker and many other tools that are used extensively in data science for advanced projects.
5. Alteryx, Inc. (NYSE: AYX)
Number of Hedge Fund Holders: 35
Alteryx, Inc. (NYSE:AYX) is a tech company providing end-to-end analytics on their platform for data analysts and scientists. The company operates globally and its analytic process automation software platform incorporates Alteryx Designer which helps with data profiling and blending. The company ranks 5th on our list of the best data stocks to buy now.
Alteryx, Inc. (NYSE:AYX) Q1 EPS was -$0.08 versus estimates of -$0.23 for that quarter. The company also reported a $118.76 million revenue representing a 12.1% growth year over year. Alteryx, Inc. (NYSE:AYX) also had $571.5 million in sales, representing a 15.38% growth year over year.
By the end of the first quarter of 2021, 35 of the 866 hedge funds tracked by Insider Monkey held stakes in Alteryx, Inc. (NYSE:AYX). The value of their stakes was roughly $749 million.
4. International Business Machines Corporation (NYSE: IBM)
Number of Hedge Fund Holders: 41
International Business Machines Corporation (NYSE: IBM) is a company providing integrated solutions and services, and operating across the globe. The Cloud and Cognitive Software segment in the company provides software for domain-specific solutions in a range of areas. The company ranks 4th on our list of the best data stocks to buy now.
International Business Machines Corporation (NYSE: IBM) entered into a five-year partnership with Hartree Centre research facility in the UK for the establishment for the Hartree National Centre for Digital Innovation this June. The partnership is worth over $290 million.
Earlier in June, Credit Suisse added IBM to its top picks of 2021 list. The firm said that these stocks have the “highest conviction combined with the least demanding market expectations.”
By the end of the first quarter of 2021, 41 of the 866 hedge funds tracked by Insider Monkey held stakes in International Business Machines Corporation (NYSE: IBM). The value of their stakes was roughly $1.36 billion.
3. Oracle Corporation (NYSE: ORCL)
Number of Hedge Fund Holders: 52
Oracle Corporation (NYSE: ORCL) provides products and services for enterprise information technology environments across the globe. The Oracle cloud software includes a range of cloud software applications like Oracle enterprise resource planning cloud. The company ranks 3rd on our list of the best data stocks to buy now.
In their first quarter 2021 report, the company reported an EPS of $0.93 versus estimates of $0.86 and a revenue of $9.37 billion representing a 3.61% growth year over year. The company also had a gross profit margin of 80.59%. The stock gained 17.38% in the past 6 months and 19.8% year to date.
By the end of the first quarter of 2021, 52 of the 866 hedge funds tracked by Insider Monkey held stakes in Oracle Corporation (NYSE: ORCL). The value of their stakes was roughly $2.89 billion.
Ariel Investments, an investment management firm, mentioned Oracle Corporation (NYSE: ORCL) in their first quarter investor letter. Here’s what they said:
“A temporary factor might be a downturn in the high-yield bond market driving up LBO financing costs for the decline in 2021 GAAP revenue for Oracle Corporation (ORCL) due to a change in accounting methods. In all these examples, stock prices were driven well-below our calculations of intrinsic value. We invested in each company with good outcomes. Later, we will offer instances when this strategy is not successful.”
2. salesforce.com, inc. (NYSE: CRM)
Number of Hedge Fund Holders: 91
Salesforce.com, inc. (NYSE: CRM) is a cloud computing solutions developer. The company focuses on customer relationship management across the globe. It ranks 2nd on our list of the best data stocks to buy now.
On June 9, salesforce.com, inc. (NYSE: CRM) launched its corporate and investment banking cloud. In the first quarter, Salesforce.com (NYSE:CRM)’s non-GAAP EPS came in at $1.21, beating the consensus estimate by $0.33. Revenue in the quarter jumped 22.4% to reach $5.96 billion, beating the consensus estimate by $70 million.
By the end of the first quarter of 2021, 91 of the 866 hedge funds tracked by Insider Monkey held stakes in salesforce.com, inc. (NYSE: CRM). The value of their stakes was roughly $8.84 billion.
ClearBridge Investments, an investment management firm, mentioned salesforce.com, inc. (CRM) in their first quarter investor letter. Here’s what they said:
“We added to our software-as-a-service (SaaS) exposure with the initiation of SaaS leader salesforce.com, which develops software for customer relationship management (we added Workday, which enterprise resource planning applications, last quarter). Saleforce.com is well-positioned in the most attractive end markets in software and will benefit from secular drivers such as remote work and the digital transformation. Salesforce.com is a sustainability leader as well, with a commitment to carbon-neutral cloud, toward which it has set a goal of 100% renewable energy for global operations by fiscal year 2022. The company has a strong focus on equality, in terms of equal rights, pay, education and opportunity. As a data company it has been leading on workforce disclosures and seeks to have 50% of its U.S. workforce made up of underrepresented groups by 2024.”
1. Alphabet, Inc. (NASDAQ: GOOG)
Number of Hedge Fund Holders: 159
Alphabet, Inc. (NASDAQ: GOOG) is a data powerhouse enabling internet and mobile app ads for millions of consumers all over the world, thanks to its dominance in search and apps business.
Alphabet, Inc. (NASDAQ: GOOG) reported $26.29 in EPS for the first quarter of this year, versus estimates of $15.66. The company’s revenue for that quarter was valued at $55.31 billion, representing an 18% growth year over year. Alphabet, Inc. (NASDAQ: GOOG) also has a gross profit margin of 54.32% and a forward PE ratio of 28.96. The stock gained 45.17% in the past 6 months and 45.4% year to date.
By the end of the first quarter of 2021, 159 of the 886 hedge funds tracked by Insider Monkey held stakes in Alphabet, Inc. (NASDAQ: GOOG). The value of their stakes was roughly $2.91 billion. This is compared to 157 hedge fund holders in the previous quarter, with stakes worth $2.05 billion.
Our calculations show that Alphabet, Inc. (NASDAQ: GOOG) ranks 6th in our list of the 30 Most Popular Stocks Among Hedge Funds.
Artisan Partners, a high value-added investment management firm, mentioned Alphabet, Inc. (NASDAQ: GOOG) in their first quarter investor letter. Here’s what they said:
“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
You can also take a peek at the 15 Most Valuable Cloud Computing Companies and 14 Best Cloud Computing Stocks To Invest In.
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Disclosure: None. 10 Best Data Stocks to Buy Now is originally published on Insider Monkey.
