Tech stocks may seem like one of the newest fads, which rise and fall unpredictably. Investors may feel that these companies are inextricably tied in with the trends of teenagers, government subsidies, or the price of cryptocurrencies. However, tech companies that process big data have a massive advantage and are worthy of sound investment. Data is more valuable than gold or oil, and the companies with both access to it, and the ability to process that data, will be the winners of the 21st century. The stocks for some of these companies may seem to be above the threshold of a small investor. Still, many investment portfolios now allow for partial shares, which permits investors to begin building their future with whatever amounts they have available. Let’s look at some investment insights for 5 of the best big data stocks on the market.
Alphabet is the parent company for Google, which dominates the marketplace as the premier online search tool. Google’s presence is so strong that the company’s name has become synonymous with the primary service which it offers. In 2020, there were nearly 7 billion Google searches every day, according to TechJury; and all of those searches voluntarily provide Google with the most valuable commodity on the planet: data. Alphabet is also the owner of YouTube, which provides a massive amount of valuable data as people post and watch nearly 5 billion videos each day. Alphabet has far more access than any other company to the data on what information people want. As technology improves, this data will only become more valuable, and those who own the stock will see their returns increase.
Amazon is the number one e-commerce platform with around 40% market share in the United States, according to InsiderIntelligence. Despite the best efforts of traditional retailers to enter the online marketplace, Amazon still dominates the space and are considered many people’s default place to shop online. During and after the pandemic, more people purchase things they need online than ever before. While Amazon makes a healthy profit from all this commerce, it also provides them with something much more valuable. Amazon has more access than any other company to the data on what things people want to buy. Each search, saved item, or purchase completed gives Amazon priceless data about market trends, targeted advertising, and customer profiles. This treasure trove of data will only become more valuable, and stock owners will reap the benefits.
Tesla is a fast-growing car company that has finally begun to post profits for the last couple of years. In July of 2021, Forbes noted that Tesla had posted eight consecutive profitable quarters, and that streak has now grown to 10. While much has been said about how long Tesla’s technological lead on producing electric cars, batteries, or a charging network, will stand up, a more important element of their business has largely been ignored. Tesla’s desire to build a fully autonomous vehicle is extremely valuable, no matter how long it takes them to achieve it. This is because, in pursuit of this goal, Tesla is capturing massive amounts of data, as its artificial intelligence tries to learn how people drive so that it can perform even better. Tesla has far more access than any other company to the data on how people transit. Every Tesla vehicle sold becomes a data-collection hub, and as more and more of them hit the streets, this data network becomes ever more valuable.
Meta, formerly known as Facebook, owns several of the largest social networks in the world. Facebook is still the number one site in terms of monthly active users, according to VisualCapitalist. While younger people increasingly view Facebook as outdated, the Meta parent company has aggressively developed and acquired other social networks such as WhatsApp, Instagram, and others to continue engaging the younger generation. These acquisitions are due to Meta understanding just how valuable data is. Meta is constantly working on getting engagement from more people and having that engagement for extended periods. Meta has more access than any other company to the data on how people interact and the relationships they value. This information is incredibly valuable, and Meta clearly intends to continue extracting the value from their consumers’ data.
Microsoft is still the dominant player in operating systems for computers, with three-quarters of all computers using their software, according to Statista. Microsoft may not have as much access to people’s daily data production as the other companies on this list. Still, it does possess some of the most powerful computing resources of any company. Microsoft has placed great importance on, and much research into, developing advanced artificial intelligence. Microsoft’s analytical tools for processing big data are some of the best on the marketplace. This is particularly important because not every company has access to their customer’s data or receives data from their customer’s voluntary engagement. However, virtually every company would like to gain the benefits of analyzing big data. For many businesses, the answer is to turn to Microsoft to provide them with the processing power and proprietary analytical tools to help their company grow and evolve efficiently. Microsoft’s strong position in this sector makes it well-positioned to take advantage of the opportunities the future offers, and consequently, their stock owners will benefit.
As Forbes noted in 2019, “Data is the new oil – and that’s a good thing.” Savvy investors have an excellent opportunity to get involved in the most value-multiplying industry that has ever existed. While it may be tempting to invest in exciting startups, the wisest course is to balance that with intelligent investment in strong big data companies that promise reliable returns.