Big data stocks may not appear to be among the most exciting technology investments. However, their underlying businesses provide an increasingly essential service: cleaning and classifying the ever-growing pool of digital data that’s out there.
The spread of smartphones, cloud computing, and the internet of things (IoT) has led to a massive increase in processed data. The pandemic has interestingly accelerated this. According to International Data Corporation, the quantity of digital data generated over the next five years will be “greater than twice the amount of data created since the advent of digital storage.”
However, many of these large, complicated data sets – referred to as “big data” – are virtually worthless, leaving them unwanted. As a result, areas of tech like A.I. are becoming increasingly important. Data is sorted by algorithms to remove noise and find patterns. Defending against cyberattacks, determining whether production equipment requires repair, and predicting customer turnover are all more examples of its usefulness. And its effectiveness is only getting stronger.
Now, let’s break down three buy-rated big data tech stocks that analysts consider to have significant growth potential, making them excellent choices for our growing portfolios:
Splunk Inc (SPLK)
Splunk, Inc (SPLK) is a cloud software company that develops and markets technologies. Splunk Cloud, Splunk Lite, and Splunk Enterprise are some of its offerings. SPLK also provides solutions for IT operations, security, IoT (Internet of Things), business analytics, application analytics, and various industries. Erik M. Swan, Michael J. Baum, and Robin K. Das started SPLK in October 2003, and it is based in San Francisco, California. SPLK is a pioneer in the field of machine-generated data analysis. As a result, its many clients have successfully obtained vital information.
SPLK‘s prosperous areas of expertise show signs of success for the business. Annual recurring revenue (ARR) increased by 75% year-over-year to $1.1 billion in the most recent quarter. SPLK also had 270 clients with ARRs of more than $1 million, roughly twice the number from the previous year. SPLK most recently beat EPS forecasts by 423.43% and revenue predictions by 16.14%. SPLK’s current quarter shows $629.7 million in sales, and it is forecasted for continued revenue growth, both quarterly and annually. The median price target for SPLK among analysts that provide 12-month price estimates is 152.00, with a high of 225.00 and a low of 125.00. The forecast is up 35.51% from its most recent price, and SPLK comes with a comfortably strong buy rating.
Elastic NV (ESTC)
Elastic NV (ESTC), formerly known as Elasticsearch, is an American-Dutch startup. ESTC is a tech firm that specializes in – and provides – self-managed and SaaS (Software as a Service) solutions for search, security, logging, observability, and analytics. Shay Banon, Steven Schuurman, Uri Boness, and Simon Willnauer founded ESTC in Amsterdam in 2012, and it is currently headquartered in Mountain View, California. ESTC has developed a sophisticated search engine to aid in its services. The engine integrates with a myriad of systems, allowing it to provide valuable insights for an entire organization. It also has built a powerful self-serve model for customer adoption that has helped accelerate growth.
The benefits of ESTC‘s strategy were validated in its most recent quarter. Sales increased by 79% year-over-year to $80.4 million, and ESTC bested analysts’ EPS forecasts by 39.12%. The company’s net expansion rate was somewhat higher than the previous quarter, at a little under 130%. In addition, the total number of customers was above 17,900, up from 13,800 the last year. ESTC currently shows year-over-year revenue growth of 42.54%, and for its current quarter so far, $232.4 million in sales. Analysts forecast quarterly revenue growth, and overall growth is expected to continue. ESTC has a consensus price target of 125.00 among analysts that provide 12-month price projections, with a high of 160.00 and a low of 90.00. The consensus estimate indicates an increase of 83.96% over current pricing, and the consensus also gives ESTC a firm buy rating that makes it well worth a look.
Datadog Inc (DDOG)
Datadog, Inc (DDOG) is a U.S.-based software development company. For real-time observability of clients, the company provides a cloud-based monitoring and analytics platform that unifies and automates infrastructure monitoring, application performance monitoring, and log management. DDOG‘s arsenal of services can also be used to assess performance indicators, as well as event tracking and cloud monitoring. DDOG was founded by Olivier Pomel and Alexis Lê-Quôc in 2010. DDOG also continues to develop new products, such as the Sensitive Data Scanner, which aids in the discovery, classification, and protection of sensitive company data, which has been a big problem for certain businesses.
DDOG‘s growth rates are rather incredible: fourth-quarter revenues increased by 84% to $326.2 million, exceeding the full-year rate of 70%. It also crushed Wall Street analysts’ EPS projections by 113.18%. The growth is as apparent as the profitability, as DDOG has exceeded projections on EPS and revenue for its last four consecutive quarters. Not to mention, DDOG shows healthy year-over-year revenue growth of 83.74% and EPS growth of 140%. The consensus price target for DDOG from analysts that provide 12-month forecasts is 200.00, with a high of 230.00 and a low of 136.00. The estimate reflects an increase of 78.75% over its most recent price. DDOG’s growth is only forecasted to continue, and its buy rating is well-earned and dependable.
