5 Best Data Storage Stocks To Buy Now

In this article, we discuss 5 best data storage stocks to buy now. If you want to read our detailed analysis of the data storage industry, click 10 Best Data Storage Stocks To Buy Now. 

5. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 99

Adobe Inc. (NASDAQ:ADBE) is a diversified software company that provides multiple storage solutions. One of the storage solutions offered by Adobe Inc. (NASDAQ:ADBE) is Adobe Creative Cloud, which enables users to store and access their creative files securely in the cloud. Similarly, Adobe Experience Cloud provides storage capabilities for managing and organizing digital assets within an enterprise environment. Moreover, Adobe Document Cloud offers storage capabilities for securely storing and managing electronic documents. Adobe Inc. (NASDAQ:ADBE) is one of the best data storage stocks to invest in. 

On June 15, Adobe Inc. (NASDAQ:ADBE) reported a Q2 non-GAAP EPS of $3.91 and a revenue of $4.82 billion, outperforming Wall Street estimates by $0.12 and $50 million, respectively. 

According to Insider Monkey’s first quarter database, 99 hedge funds were bullish on Adobe Inc. (NASDAQ:ADBE), with collective stakes worth $7.3 billion. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company. 

Polen Focus Growth Strategy made the following comment about Adobe Inc. (NASDAQ:ADBE) in its Q1 2023 investor letter:

“One area we are watching regarding Alphabet and Adobe Inc. (NASDAQ:ADBE) is AI systems and their capabilities, including generative AI. Interestingly, both Adobe and Alphabet could see benefits or threats from the emergence of generative AI and large language models (LLMs). Both companies already use generative AI to the benefit of their users in anticipating how content creators edit their work (Adobe) and in how search results are anticipated and generated (Google). At the same time, breakthrough technologies like AI can open the door to additional competition and/or impact a company’s profitability levels. We now see AI systems others are developing, including LLMs and generative AI offerings, that could be more competitive in the future. While we think it remains early days for ChatGPT and the capabilities of these types of LLMs and generative AI programs like DALL-E, the technology seems to be progressing at a fast rate and will at least require a strong response from incumbents.

As of now, we believe Alphabet and Adobe are leaders in their own right in these areas and have a clear path to improving their existing offerings with AI advancements, which would allow them to be net beneficiaries of AI. There are also significant barriers to building leading AI offerings in these areas. As a result, our position sizes in Adobe and Alphabet remain sizable. For Adobe, the status of its pending $20 billion-plus Figma acquisition is also uncertain. There is a good chance, in our view, that it will be blocked by regulators, which would mean the future opportunity to expand its offerings to the developer community (beyond designers) may not occur.”

4. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 136

Salesforce, Inc. (NYSE:CRM) provides scalable and flexible storage options to accommodate the needs of businesses. Salesforce, Inc. (NYSE:CRM)’s storage solutions also integrate with other features of the CRM platform, such as sales, marketing, and service automation. It is one of the best data storage stocks to invest in. On May 31, Salesforce, Inc. (NYSE:CRM) reported a Q1 non-GAAP EPS of $1.69 and a revenue of $8.25 billion, outperforming Wall Street consensus by $0.08 and $80 million, respectively. In the first quarter, Salesforce, Inc. (NYSE:CRM)’s stockholders also received $2.1 billion through share repurchases.

According to Insider Monkey’s first quarter database, 136 hedge funds were long Salesforce, Inc. (NYSE:CRM), compared to 117 funds in the prior quarter. Harris Associates is the biggest stakeholder of the company, with 7.71 million shares worth $1.5 billion. 

Ithaka US Growth Strategy made the following comment about Salesforce, Inc. (NYSE:CRM) in its first quarter 2023 investor letter:

“Salesforce, Inc. (NYSE:CRM) is the largest pure-play cloud software company, holding a leading market share in customer relationship management applications and a top-five market share position in the company’s other clouds (Marketing, Service, Platform, Analytics, Integration, and Commerce). The company’s software subscription term-license model differs from the traditional perpetual-license software model in two respects: (1) the software is hosted on centralized servers and delivered over the internet, as opposed to traditional enterprise software that is loaded directly onto customers’ hard drives or servers; and (2) the revenue model is subscription-based, typically charging monthly fees per user as opposed to charging one-time licensing fees. The stock’s strong relative performance followed a strong F4Q23 earnings release that easily beat Street expectations on the top- and bottom-lines. In addition to the beat, management announced a number of initiatives that activist investors have been clamoring for, specifically a halt to large M&A transactions and a focus on operating profitability.”

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 155

Alphabet Inc. (NASDAQ:GOOG)’s Google Cloud Storage provides businesses with a reliable, scalable, and secure solution for storing and managing their data in the cloud. It is one of the best data storage stocks to invest in. On April 25, Alphabet Inc. (NASDAQ:GOOG) reported a Q1 GAAP EPS of $1.17 and a revenue of $69.79 billion, outperforming market estimates by $0.10 and $950 million, respectively. On April 19, 2023, Alphabet’s board of directors granted authorization for the company to buy back an extra $70.0 billion worth of its Class A and Class C shares.

According to Insider Monkey’s first quarter database, 155 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), compared to 152 funds in the prior quarter. Harris Associates is the leading position holder in the company, with 36.90 million shares worth $3.8 billion. 

ClearBridge Large Cap Value Strategy made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its first quarter 2023 investor letter:

“While Alphabet Inc. (NASDAQ:GOOG) was another positive contributor in the quarter, we trimmed the position given the launch of Microsoft’s new generative AI product (“Bing AI”) which is targeted directly at Alphabet’s core search business. While we believe Alphabet’s business model is likely to remain resilient given the breadth of its user data as well as its internal innovations around AI, we continue to monitor the area closely given the rapid adoption of ChatGPT and other generative AI products.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 243

Amazon.com, Inc. (NASDAQ:AMZN) offers extensive and scalable storage options as part of its cloud computing platform, Amazon Web Services (AWS). With AWS storage services, users can securely store and manage their data in the cloud. Amazon.com, Inc. (NASDAQ:AMZN) is one of the top data storage stocks to watch. On April 27, Amazon.com, Inc. (NASDAQ:AMZN) reported a Q1 GAAP EPS of $0.31 and a revenue of $127.4 billion, exceeding Wall Street estimates by $0.11 and $2.85 billion, respectively. AWS segment sales rose 16% year-over-year to $21.4 billion.

According to Insider Monkey’s first quarter database, 243 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), compared to 240 funds in the prior quarter. Boykin Curry’s Eagle Capital Management is a prominent stakeholder of the company, with 15.6 million shares worth $1.6 billion. 

Alphyn Capital Management made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2023 investor letter:

“In my 2002 Q4 letter, I outlined quantitative reasoning for why I believe the company’s financials mask its true earnings power. More qualitatively, Amazon.com, Inc. (NASDAQ:AMZN) continues to make strategic strides that enhance its appeal as an investment. Firstly, Amazon’s willingness to streamline costs and shutter underperforming initiatives demonstrates prudent financial management. The company’s overhaul of its fulfillment network, transitioning from a national to a regional model, will improve efficiency and delivery speed, resulting in lower costs and increased customer satisfaction, both critical drivers of revenue growth. Second, Amazon’s unparalleled scale, leading e-commerce platform position, and technology investments attract advertisers eager to engage with its vast customer base and provide consumers with highly targeted ads. This strategy has propelled Amazon’s advertising business to surpass broader market trends. Finally, Amazon remains a long-term growth entity. With retail, 80% of shopping is still offline, and Amazon has been steadily expanding its business sales (currently at $35 billion) and international presence. With AWS, despite near-term conservative enterprise spending, 90% of global IT spending remains on-premise. With other bets, Amazon has ambitious forays into diverse sectors such as grocery, healthcare, and satellite internet connectivity.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 289

Microsoft Corporation (NASDAQ:MSFT) offers storage options through its cloud computing platform, Microsoft Azure. Microsoft Azure offers different features, performance levels, and pricing models to cater to various storage requirements. Microsoft Corporation (NASDAQ:MSFT) is one of the best data storage stocks to monitor. On June 14, the company declared a quarterly dividend of $0.68 per share, in line with previous. The dividend is payable on September 14, to shareholders of record on August 17. 

According to Insider Monkey’s first quarter database, 289 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 259 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the biggest stakeholder of the company, with 39.2 million shares worth $11.3 billion. 

L1 Capital International Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its first quarter 2023 investor letter:

“We commented in the December 2022 Quarterly Report “sentiment towards many high-quality technology and ecommerce related businesses like Amazon and Alphabet is negative. Capital flows and an over-emphasis on short-term challenges is driving share prices well below fair value, providing compelling investment opportunities for longer term investors”. In that report we outlined in detail why Amazon’s share price has been oversold and offered compelling value.

During the March 2023 quarter the share price of many large capitalization technology companies increased significantly. The Fund has investments in Alphabet, Amazon and Microsoft Corporation (NASDAQ:MSFT) and their share prices increased 17%, 23% and 20% (in U.S. dollars), respectively. While we continue to see value in these privileged, high-quality businesses, share prices are no longer trading at materially oversold levels and we have selectively started to trim some of the Fund’s exposure. Microsoft was trimmed due to share price performance and position size.”

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