We recently compiled a list of the 15 Best New Tech Stocks To Invest In. In this article, we are going to take a look at where Rubrik Inc. (NYSE:RBRK) stands against the other feminist stocks.
On January 8, Rashaun Williams, Atlanta Falcons limited partner and venture capitalist, joined “Closing Bell” on CNBC to discuss his investment strategy and his outlook on the IPO market as 2025 began. He acknowledged the high expectations for a revival in the tech sector’s IPO activity but noted that such optimism required multiple factors to align perfectly, something that had not yet occurred. Despite this, he emphasized the importance of holding onto optimism, as the tech IPO market continues driving innovation and economic growth. Williams highlighted that while the primary IPO market faced challenges, the secondary market had gained prominence, which provided liquidity for founders and employees. This ensured that companies could sustain themselves through downturns.
Williams also discussed his perspective as an alternative investment manager and noted a shift in investor interest toward alternative assets. Over the past year, he observed heightened enthusiasm for late-stage tech companies, particularly those focused on AI and cybersecurity. These sectors have been pivotal in driving activity within his portfolio and funds. He emphasized that late-stage AI companies are generating substantial interest due to their transformative potential and alignment with current technological trends.
On the same day, Keith Fitz-Gerald, principal of Fitz-Gerald Group, also appeared on CNBC on ‘The Exchange’ to discuss his bullish case for tech. As 2025 began, the tech sector experienced a notable decline, with the NASDAQ 100 falling 1.5%, largely due to NVIDIA’s 5% drop, which shaved 90 points off the index. Despite this, Fitz-Gerald viewed the downturn as an opportunity. He highlighted the imminent monetization of AI and described the recent rally as child’s play, and predicted that the S&P 500 could exceed 7,000 by midyear, which was a bold claim grounded in his belief in the strength of US-based AI companies with dominant market positions and profit margins.
On concerns about high valuations, he acknowledged historical trends linking elevated P/E ratios to lower returns but argued that this is misleading for digital companies. He explained that businesses benefiting from economies of scale, like those in AI, naturally exhibit higher P/E ratios due to minimal costs for acquiring incremental customers. This signal strength rather than overvaluation. He dismissed concerns about the current market softness and characterized it as a technical sell-off due to large traders reallocating funds rather than a reflection of weak fundamentals. He said that AI’s expansion and the trillions being invested into it mark only the beginning of a transformative era for tech.
Methodology
We first used the Finviz stock screener to look for companies that went public in the past 3 years. We sorted our screen by IPO date and market cap and looked through the top 35 stocks that recently went public and are trading at a valuation of over $1 billion. We then selected 15 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.
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 data center filled with the latest servers and networking equipment representing the company’s cutting edge security infrastructure.
Rubrik Inc. (NYSE:RBRK)
Market Capitalization as of January 21: $12.58 billion
Number of Hedge Fund Holders: 23
Rubrik Inc. (NYSE:RBRK) provides data security solutions that protect businesses from data loss and cyber threats. Its offerings include data protection for various environments, threat analytics, and cyber recovery solutions, and serves various industries globally.
Barclays analyst Saket Kalia raised its Rubrik Inc. (NYSE:RBRK) price target to $78 from $70 on January 6, maintaining an Overweight rating. The analyst’s outlook comes from the improving market conditions, AI opportunities, and potential margin growth within the security software sector. Wall Street analysts believe that the company is positioned to gain market share from traditional data backup providers. As companies increasingly prioritize cyber resilience strategies over simple prevention, this company’s integrated platform offers a compelling solution.
The company is growing through security enhancements and a customer-centric approach. Partnerships with cybersecurity leaders like Mandiant, CrowdStrike, and Zscaler further solidify its reputation. Its cloud-native platform facilitates seamless data management and protection across diverse infrastructures, which is a key advantage over legacy solutions.
ClearBridge SMID Cap Growth Strategy participated in Rubrik Inc.’s (NYSE:RBRK) IPO and highlighted the company’s growth, market share gains, and potential for expansion through AI-powered data security solutions. It stated the following regarding the company in its Q2 2024 investor letter:
“The IPO and capital markets have begun to rebound, albeit slowly, providing new investment opportunities and idea generation. In fact, this quarter saw our first IPO participation since the capital markets fervor of 2021 with data security provider Rubrik, Inc. (NYSE:RBRK). Rubrik, meanwhile, is a next-generation data storage, backup and recovery provider showing strong, double-digit subscription revenue growth. We believe its cloud-based offerings have resonated with its Fortune 500 customer base, positioning it well to continue to take share from legacy data backup providers. The introduction of new AI data security products could offer an additional revenue source to Rubrik’s business.”
Overall RBRK ranks 10th on our list of the new tech stocks to invest in. While we acknowledge the potential of RBRK 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 RBRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.