In this piece, we will take a look at the 10 best predictive analytics stocks to buy.
In the realm of data science, predictive analytics, sometimes known as big data analytics, plays a vital role in the arsenal of modern businesses. It represents a branch of advanced analytics that employs statistical algorithms and machine learning techniques to assess the likelihood of future events, drawing insights from historical data. Additionally, it incorporates tools and methods such as data mining and modeling, all geared toward scrutinizing data, recognizing patterns, and making informed predictions. As per Fortune Business Insights, the global predictive analytics sector is projected to witness a compound annual growth rate (CAGR) of 13.5% from 2022, reaching a market size of $745.15 billion by the close of the decade. The industry’s size was recorded at $271.83 billion in 2022.
The integration of predictive analytics with artificial intelligence (AI) has sparked a transformation in enhancing the depth of data insights. This combination brings flexibility to decision-making, anticipates potential successes, and reveals unexpected opportunities. A report on the AI industry revealed that it is anticipated to experience significant growth, with a projected CAGR of 21.6%. This expansion is expected to elevate the industry’s size to $2.03 trillion by the year 2030, a notable increase from the $428 billion recorded in 2022. When integrated into predictive analytics, AI holds the potential to serve as a substantial facilitator for business operations.
By the year 2025, the global data landscape is projected to encompass 150 billion gigabytes for exploration and comprehension. This represents a 33-fold surge in the volume of data and information available for analysis compared to 2013 when it measured 4.4 billion gigabytes. International Business Machines Corporation (NYSE:IBM), a prominent name in the tech realm, asserts that the U.S. economy experiences an annual loss of $3.1 trillion attributed to inadequate data quality. As such, predictive analytics, amongst other tech advancements, are set to revolutionize the industry, presenting numerous opportunities for investors looking to dip into the market.
This article delves deeper into the best predictive analytics stocks for potential investment. Some prominent names for consideration encompass Salesforce, Inc. (NYSE:CRM), Snowflake Inc. (NYSE:SNOW), and Alphabet Inc. (NASDAQ:GOOG), among others listed below.
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Our Methodology
We have shortlisted the 10 best predictive analytics stocks using Insider Monkey’s database of 910 hedge funds. The companies selected have substantial exposure to the predictive analytics and big data analytics industry through various business operations. The following stocks have been listed in ascending order of the number of hedge funds holding a stake in them as of Q3 2023.
10. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holder: 55
Accenture plc (NYSE:ACN) is an international professional services firm offering an extensive array of services and solutions encompassing strategy, consulting, digital, technology, and operations. With a focus on enhancing organizational performance, Accenture plc (NYSE:ACN) works collaboratively with clients to create sustainable value for their stakeholders.
On June 13, Accenture Plc (NYSE:ACN) unveiled a $3 billion investment plan spanning three years for its Data & AI practice, aimed at expediting the adoption and implementation of AI services. This strategic initiative encompasses the doubling of AI talent within the company to reach 80,000 individuals, achieved through a combination of recruitment, acquisitions, and training. As of November, Accenture Plc (NYSE:ACN) has announced agreements for the acquisition of Solnet, a New Zealand-based IT services provider; The Shelby Group, a prominent provider of digital procurement and optimization services; Innotec Security, a cybersecurity company based in Spain; and successfully completed the acquisition of ConcentricLife, a healthcare marketing agency and subsidiary of Stagwell.
As of Q3 2023, Accenture Plc (NYSE:ACN) shares were owned by 55 of the 910 hedge funds tracked by Insider Monkey, for a total value of $2.02 billion. GuardCap Asset Management was the largest shareholder with ownership of 1.9 million shares valued at $576 million.
In addition to Salesforce, Inc. (NYSE:CRM), Snowflake Inc. (NYSE:SNOW), and Alphabet Inc. (NASDAQ:GOOG), Accenture Plc (NYSE:ACN) is one of the best predictive analytics stocks to buy.
9. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holder: 71
Snowflake Inc. (NYSE:SNOW) is a company headquartered in Bozeman, Montana, offering a rapid and adaptable cloud data platform called the Snowflake Data Cloud. This platform is designed to support contemporary Big Data warehousing and analytics projects. The company utilizes a distinctive cloud-optimized architecture, separating storage, computing, and query processing to enhance scalability and performance.
On November 20, Citi analyst Tyler Radke upheld a Buy rating on shares of Snowflake Inc. (NYSE:SNOW) with a price target of $191, citing indications from fieldwork that point to easing optimizations and promising early traction for new products.
During Q3 2023, 71 out of the 910 hedge funds part of Insider Monkey’s database had held a stake in Snowflake Inc. (NYSE:SNOW). In the same quarter, Brad Gerstner’s Altimeter Capital Management was the biggest shareholder due to its $2.35 billion stake.
ClearBridge Multi Cap Growth Strategy made the following comment about Snowflake Inc. (NYSE:SNOW) in its Q2 2023 investor letter:
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology.
Snowflake Inc. (NYSE:SNOW), a cloud-based data platform company, is positioned well to help enterprises better leverage their own data to get the most out of AI models. Though it is still early days in terms of adoption, Snowflake saw workloads for data science, machine learning, and AI use cases grow more than 90% year-over-year in its most recent quarter.”
8. Datadog, Inc. (NASDAQ:DDOG)
Number of Hedge Fund Holder: 83
Datadog, Inc. (NASDAQ:DDOG) offers an observability service designed for cloud-scale applications, delivering monitoring capabilities for servers, databases, tools, and services through its SaaS-based data analytics platform. The company’s tool serves as a monitoring and analytics solution for information technology, enabling the assessment of performance metrics and event monitoring for infrastructure and cloud services.
Earlier in November, Datadog, Inc. (NASDAQ:DDOG) reported its Q3 results. The adjusted EPS for the quarter was $0.45, surpassing estimates by $0.11. The revenue for the quarter saw a year-over-year increase of 25.4% to $547.54 million, exceeding estimates by $23.3 million.
As of Q3 2023 end, 83 out of the 910 hedge funds part of Insider Monkey’s database had held a stake in the company. Datadog, Inc. (NASDAQ:DDOG)’s largest hedge fund shareholder is Paul Marshall And Ian Wace’s Marshall Wace LLP due to its $282.4 million stake.
Here’s what RiverPark Advisors said about Datadog, Inc. (NASDAQ:DDOG) in its Q1 2023 investor letter:
“Datadog, Inc. (NASDAQ:DDOG): DDOG was a top detractor in the quarter. The company reported strong 4Q results including 44% revenue growth and 30% earnings growth but gave cautious revenue guidance for 2023. Macroeconomic headwinds have caused clients to slow the transition of workloads to the cloud and instead to optimize current capacity. Despite this temporary slowdown, DDOG still expects revenue to grow nearly 25% in 2023.
As businesses have transitioned to cloud software infrastructure, much of which is in isolated data silos, it has become increasingly difficult for data engineers to monitor and analyze system performance. Datadog provides a SaaS software platform to monitor and analyze the system performance of software applications and IT infrastructure by giving users a single page view to observe their company’s technology stack. The company has quickly grown its revenue from $100 million in 2017 to $1.7 billion in 2022 and, we believe, should continue to grow revenue at more than 20% annually as it penetrates its $40 billion and fast-growing market. Less than 10% of software applications are currently monitored. The company’s dollar-based net retention rate has been 130%+ as existing customers continue to use an increasing number of products and the company continues to add new features. As of 4Q22, 81% of customers used 2+ products, while only 18% of customers used 6+ products (up from less than 1% two years ago). As an extremely capex light software business, DDOG already has significant free-cash-flow ($350m in 2022) and free-cash-flow margins (21% in 2022).”
7. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holder: 87
Broadcom Inc. (NASDAQ:AVGO) is a multinational company based in the United States that specializes in the design, development, manufacturing, and global distribution of a diverse array of semiconductor and infrastructure software products. The range of products offered by Broadcom caters to markets such as data centers, networking, software, broadband, wireless, storage, and industrial sectors.
Recently, Broadcom Inc. (NASDAQ:AVGO) successfully concluded its acquisition of software manufacturer VMware Inc. after an unexpectedly prolonged 18-month process, ultimately receiving approval in China. The deal, initially valued at $61 billion when announced in May 2022, represents a strategic move by the chipmaker to expand its presence in the software sector. A Broadcom Inc. (NASDAQ:AVGO) spokesperson stated that the company aims to strengthen its position in hybrid cloud services, serving businesses that store data both within their own facilities and external server farms.
At the end of September 2023, 87 hedge funds in Insider Monkey’s database, up from 72 in the previous quarter, owned investments in Broadcom Inc. (NASDAQ:AVGO). The consolidated value of stakes owned by these hedge funds is roughly $6.2 billion. Ken Fisher, Rajiv Jain, and Ken Griffin were some of the company’s leading stakeholders in Q3.
6. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holder: 88
Oracle Corporation (NYSE:ORCL), a distinguished technology powerhouse, is renowned for its software products and services, notably Java. The company operates through four primary business segments—cloud and license, hardware, services, and database management systems. Oracle provides cloud engineering services and systems, and it acquired Cerner, a company specializing in patient data systems for healthcare organizations, last year.
On November 13, Edward Jones upgraded its rating on ORCL stock from ‘Hold’ to ‘Buy’. The bank is optimistic about Oracle Corporation (NYSE:ORCL)’s significant efforts to expand its range of cloud services and its shift towards a subscription revenue model, anticipating a substantial acceleration in sales growth.
Insider Monkey dug through 910 hedge funds for their June quarter of 2023 shareholdings and found that 88 had bought Oracle Corporation (NYSE:ORCL)’s shares. Ken Fisher’s Fisher Asset Management was the firm’s biggest stakeholder as of September 2023 courtesy of its $1.9 billion investment.
Oakmark Global Fund made the following comment about Oracle Corporation (NYSE:ORCL) in its Q3 2023 investor letter:
“Oracle Corporation (NYSE:ORCL) (U.S.), a global software company, was the Fund’s top contributor for the fiscal year, with its share price rising primarily after reporting its fiscal fourth-quarter results. More recently, Oracle announced fiscal first-quarter results, which were in line with consensus expectations. The drivers of the core business are performing well, in our view, and management expressed confidence that annual revenue growth will accelerate as planned based on demand trajectory and its strong bookings trends. For the quarter, total revenue increased 8% in constant currency (9% reported), and operating income grew 12% with margins showing improvement. Cloud and support revenue grew 11% in constant currency, powered by Fusion +20% and Netsuite +21%. The “strategic back office cloud” is now up to $6.9 billion in run-rate revenue. Infrastructure cloud and support revenue grew 14% in constant currency, powered by infrastructure cloud services +72% ex-legacy hosting services to $5.6 billion in run-rate revenue. Momentum is continuing to build as Oracle signed several deals for its cloud business greater than $1 billion in total value during the quarter and booked an additional $1.5 billion in the first week of the second quarter. We continue to believe Oracle is an attractive holding and undervalued due to our perception of its intrinsic value.”
Much like Salesforce, Inc. (NYSE:CRM), Snowflake Inc. (NYSE:SNOW), and Alphabet Inc. (NASDAQ:GOOG), Oracle Corporation (NYSE:ORCL) ranks as one of the best predictive analytics stocks to invest in.
5. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 122
Salesforce, Inc. (NYSE:CRM), headquartered in San Francisco, California, operates as an American cloud-based software company specializing in customer relationship management. The company provides tailored software and applications for sales, customer service, marketing automation, e-commerce, analytics, and application development.
On August 30, Salesforce, Inc. (NYSE:CRM) unveiled its fiscal 2024 second-quarter results, reporting earnings of $2.12 per share. This marked a substantial 78% increase compared to the same quarter the previous year, propelled by an 11% rise in revenue, surpassing $8.6 billion. The company is scheduled to announce its fiscal Q3 results on November 30 after the market closes. Salesforce, Inc. (NYSE:CRM) anticipates revenue between $8.70 billion and $8.72 billion, with diluted earnings per share ranging from $1.02 to $1.03, according to its guidance. Analysts project a 53% growth in earnings for the full fiscal year.
Among the 910 hedge funds in Insider Monkey’s Q3 2023 database, 122 invested in the company. Notably, Ken Fisher’s Fisher Asset Management emerged as the largest shareholder during this period with a $2.87 billion investment.
Harding Loevner Global Equity Strategy made the following comment about Salesforce, Inc. (NYSE:CRM) in its Q2 2023 investor letter:
“Salesforce, Inc. (NYSE:CRM), a company we’ve owned since 2019, recently added ChatGPT-like capabilities onto its existing Al module, Einstein, to support its internal sales efforts and customer-facing software. For example, Einstein GPT can help generate marketing emails tailored to specific clients by using Salesforce’s customer database and past email correspondence to learn the most effective approach for each client. Einstein GPT is also different from off-the-shelf LLMS in three important ways: It keeps personal identifiable information private and secure, compared with external tools that retain anything a user enters. It employs the latest data in Salesforce’s system, as opposed to the sometimes-stale public data that train generic models. And generative Al capabilities can be integrated with other Salesforce offerings; the company has already introduced Slack GPT and Tableau GPT, Al-equipped versions of its workplace collaboration and analytics tools.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 163
A major player in the technology industry, Alphabet Inc. (NASDAQ:GOOG) is anchored by Google, a search engine that processes billions of daily queries. The company possesses various platforms for video streaming and productivity, with YouTube being a standout asset.
Internally, Google employs predictive analytics to analyze petabytes of data generated from its diverse services, including Search, Maps, Gmail, YouTube, and Cloud. The company possesses extensive expertise and technologies dedicated to storage, processing, analytics, and machine learning.
As of the conclusion of the third quarter in 2023, 163 hedge funds held stakes in Alphabet Inc. (NASDAQ: OOG). The most significant stake during this period was held by Ken Fisher’s Fisher Asset Management, which owns a stake valued at $5.72 billion in the company.
Ensemble Capital Management made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2023 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) (+9.32%): Separate from all the discussion of artificial intelligence, Google’s core Search business, having experienced a significant slowdown in 2022, now shows clear signs of reacceleration. While the future of AI and its impact on Google is still subject to a healthy debate, the company seems to have put to bed investor concerns about any rapid negative impact. With Search revenue growth accelerating, and the company rolling out lots of new AI tools, the investor panic from the beginning of the year about AI immediately hurting Google appears to have been overblown.”
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 180
Based in Santa Clara, California, NVIDIA Corporation (NASDAQ:NVDA) is an American multinational technology company incorporated in Delaware. Renowned for its proficiency in integrated circuit development, NVIDIA’s expertise spans a diverse range of devices, from electronic game consoles to personal computers (PCs). The graphic processing units (GPUs) offered by the company provide significant processing power, particularly advantageous for executing parallelizable workloads such as machine learning, deep learning, and analytics.
On November 21, NVIDIA Corporation (NASDAQ: NVDA) disclosed its financial results for the third quarter, concluding on October 29, 2023. The company reported a revenue of $18.12 billion, indicating a substantial increase of 206% compared to the same period last year and a notable 34% rise from the previous quarter. GAAP earnings per diluted share for the quarter were $3.71, reflecting a more than 12-fold increase from a year ago and a 50% uptick from the previous quarter. Non-GAAP earnings per diluted share were $4.02, signifying an almost 6-fold rise from a year ago and a 49% increase from the previous quarter.
Insider Monkey’s analysis of hedge fund portfolios for Q3 2023 revealed that 180 hedge funds had a stake in NVIDIA Corporation (NASDAQ: NVDA). Citadel Investment Group emerged as its largest stakeholder, holding approximately 21.85 million shares valued at about $9.5 billion in NVIDIA Corporation (NASDAQ: NVDA).
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN), a major American multinational technology company, operates across various sectors, including e-commerce, cloud computing via Amazon Web Services (AWS), online advertising, digital streaming, and artificial intelligence. The company has been a trailblazer in leveraging data analytics and recommendations for e-commerce, utilizing technologies like DynamoDB, Redshift, and EMR. Additionally, AWS offers managed Big Data services such as Kinesis, Glue, Athena, EMR, Redshift, and Quicksight for cloud-based data processing.
On November 2, HSBC initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN) with a “Buy” rating and a price target of $160. The analysts at the firm underscored Amazon’s significant potential in the cloud computing sector, surpassing even its robust customer loyalty in e-commerce. HSBC highlighted AWS as a compelling narrative in the technology industry, emphasizing that any short-term growth challenges do not overshadow the company’s promising long-term growth prospects.
By the end of Q3 2023, 286 out of the 910 hedge funds profiled by Insider Monkey had bought and owned Amazon.com, Inc (NASDAQ:AMZN)’s shares. As of September 2023, Ken Fisher’s Fisher Asset Management was the firm’s largest shareholder as it owned 41 million shares which were $5.2 billion.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 306
Microsoft Corporation (NASDAQ:MSFT), an American multinational technology company headquartered in Redmond, Washington, is renowned for its software products, which include the Windows line of operating systems, the Microsoft 365 suite of productivity applications, and the Edge web browser. The company is investing in Big Data analytics with Azure Synapse Analytics, delivering a cloud data warehouse tailored for enterprise business intelligence (BI) and analytics on extensive datasets. It incorporates query acceleration through dedicated SQL pools.
In a recent disclosure, Microsoft Corporation (NASDAQ:MSFT) shared its financial results for the first quarter of the 2024 fiscal year. The tech giant reported impressive revenue of $56.5 billion, coupled with a net income of $22.3 billion in Q1. These figures indicate significant growth, with revenue climbing by 13%, and net income experiencing a notable surge of 27%. Although the Devices segment encountered some challenges in this quarter, there was a modest recovery observed in the Windows division. Notably, Microsoft Corporation (NASDAQ:MSFT)’s cloud services and Office suite saw substantial growth, with Cloud revenue reaching $31.8 billion, showcasing a 24% year-over-year increase.
As per Insider Monkey’s Q3 2023 database, Microsoft Corporation (NASDAQ:MSFT) emerged as the most favored stock among hedge funds, with 306 funds maintaining stakes in the company, collectively valued at nearly $72.1 billion.
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Disclosure. None. 10 Best Predictive Analytics Stocks to Buy is originally published on Insider Monkey.
