In the late 1990s and early 2000s, the internet completely changed the way the business world operates and created a tremendous amount of wealth for investors who picked early winners. The next major technological transition for global businesses will be collection and analysis of data using artificial intelligence. The so-called “big data” revolution will help companies streamline their businesses like never before. But much like the dot-com boom, not all big data stocks will end up winners. Here are seven big data, automation and AI winners and losers chosen by the Bank of America analyst team.
Winner: Telefonica S.A. (ticker: TEF)
Telefonica is the largest telecom company in Spain and also has assets in Germany, the U.K. and Latin America. Telefonica launched its LUCA big data services unit for corporate clients in 2016. LUCA provides services such as data management, data science, business insights and other analysis and infrastructure tools. Analyst David Wright says Telefonica’s improving cash flow growth is a bullish catalyst and the stock’s 5.8 percent dividend is safe. Bank of America has a “buy” rating and $12.54 price target for TEF stock.
Winner: Splunk (SPLK)
Splunk may be the purest play on big data in the market today. Splunk is a software platform specializing in collecting, sorting, searching and analyzing machine-generated data. The more connected and automated the world gets, the more data connected devices will be generating. Analyst Kash Rangan says Splunk’s transition to a subscription-based recurring revenue model is a positive move for the company. In the most recent quarter, Splunk reported 35 percent billing growth, 39 percent revenue growth and 43 percent software revenue growth. Bank of America has a “buy” rating and $135 price target for SPLK stock.
Winner: Microsoft Corp. (MSFT)
Microsoft and its Azure cloud platform is at the epicenter of the big data and AI revolution. The Microsoft AI platform provides customers with tools such as the Bot Framework, Cognitive Services and Azure Machine Learning. Its Azure Databricks are designed to make analyzing large volumes of data distributed across computer structures as simple as possible. Rangan says Microsoft has masterfully transitioned its business away from a PC and server component-driven model, and shareholders will reap the benefits. Bank of America has…
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