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Big Data Still Holds Big Potential

By Matt McCallAug 23, 2017


I like to maintain a watch list of prospective stock recommendations for my NexGen subscribers, and over the summer that list has ballooned to more than 160 names! That should tell you just how ripe with profit potential this market still is, and the recent pullback is providing even better entry points that I’m excited to move on soon.

Several of the names on my watch list come from one of my favorite mega-trends: the Tech Revolution. This is truly one of the most exciting areas I’ve had the privilege of watching develop over the years, and we’re starting to see some amazing new advances come to life. Everything from cloud computing to mobile technology to the Internet of Things (IoT) to robotics … it all fascinates me! And even more compelling is the amount of money that can be made investing in the innovative companies that are driving this NexGen revolution higher.

Today I want to highlight one area of the Tech Revolution that I’m sure you’ve heard about: Big Data. The term has been part of our vernacular for almost a decade now, yet this is a niche area that still isn’t completely understood by investors (meaning Old Wall Street) and therefore is often overlooked.

That’s mainly because the magnitude to which data is used by individuals and corporations is difficult to fathom. According to International Business Machines (IBM), 2.5 quintillion bytes of data are created each day. (Did you even know quintillion was a number?) To put that into perspective, 90% of all global data has been created in just the last two years. Here’s another way to look at it: every minute there are 2.5 million shares on Facebook, 4 million search inquiries on Google and 200 million emails sent. Every single minute.

These numbers are great for companies in the data business, but there are also a few challenges. How can such a large amount of data be organized properly without causing an information overload? And how can the organized data then be used to help corporations increase sales and better their businesses?

These are the mega questions in this mega-trend, especially with so many new devices and software contributing to the expansion. For example, modern cars already have 100 sensors that monitor a variety of systems and store data; the cars of the future will not only store that data but share it with other drivers (or operators of driverless vehicles) on the road. By 2020, an estimated 25 billion IoT devices will be connected – from smart fridges alerting you that the milk is getting low to smart cement surrounding an oil well helping workers better assess drilling risk – and they will all be sharing and storing even more data.

So you can see that this offshoot of the Tech Revolution impacts a wide range of industries, and with it comes the need for software, hardware and storage services. That means our investment opportunities are just as wide-ranging, and it’s one of the big reasons I’m so excited by Big Data!

3 Names to Watch

That brings us back to my watch list. As I mentioned, it includes several tech names right now and today I want to tell you about three of them – all of which are in the Big Data space.

Before we get to them, you may have heard about a Big Data ETF that was shut down recently due to low assets under management. That doesn’t mean there isn’t a big future for this NexGen sector, the vehicle just wasn’t the right fit at the right time. However, some of the largest holdings of that ETF are standout names within the theme that are at the top of my list right now.

The first is Medidata Solutions (MDSO), which provides cloud-based solutions for the healthcare industry. The Big Data tie-in comes from the company’s electronic data capture and management that is essential in the industry. Another name on my radar is Tableau (DATA), a provider of business analytics software that allows customers to access data independently. They also offer data management to large-scale corporations, making it a diverse way to capture this trend on multiple levels.

Finally, CoreSite Realty (COR) will be a familiar name to my NexGen Investor subscribers as it has already made them a 16% profit since May. But I continue to see upside here that makes it worth keeping on your watch list.  This is a play on Big Data through real estate, and it’s a REIT that owns data facilities that house the servers. The way these facilities are retrofitted is very expensive and detailed, and the demand is surging. That makes COR an attractive stock right now, as does its 3.22% dividend.

There’s no question the Big Data remains an integral part of the Tech Revolution, and its ever-advancing technologies mean major profit potential for investors. We’re already taking advantage of the exciting opportunities this NexGen trend provides, and as you can see from my watch list, there will be many more ahead as it continues to develop.

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