What exactly is "data chaos" and why does it matter for investing?

Data chaos refers to the overwhelming volume and complexity of digital information being generated daily. Companies, governments, and individuals produce exabytes of data that must be stored, organized, and analyzed to be valuable. The companies in this portfolio provide the essential tools to transform this chaos into useful insights. As data continues to grow exponentially (doubling every 2-3 years), these businesses become increasingly critical to the functioning of our digital economy.

How does artificial intelligence relate to these data companies?

AI and data management have a symbiotic relationship. AI systems require enormous amounts of well-organized data to train and operate effectively. At the same time, AI is one of the best tools for analyzing and extracting value from massive datasets. The companies in this portfolio provide both the infrastructure that makes AI possible (data storage, processing power) and the tools that leverage AI to analyze data (analytics platforms, visualization software). The recent explosion in generative AI has dramatically increased demand for sophisticated data management solutions.

What's the difference between cloud providers and specialized data companies?

Cloud providers like Amazon (AWS), Microsoft (Azure), and Google Cloud offer broad infrastructure services, including data storage and basic analytics tools. They provide the foundation—the "real estate"—where data lives. Specialized data companies like Snowflake, MongoDB, and Palantir build more targeted solutions on top of this foundation, focusing on specific challenges like database management, data visualization, or security analysis. This portfolio includes both types, giving you exposure to the entire data ecosystem from basic storage to advanced analytics.

How risky are investments in data management companies?

Like most technology investments, data companies carry both significant potential and risk. The established cloud giants (Amazon, Microsoft, Google) tend to be more stable but with potentially slower growth. Specialized data companies may offer higher growth potential but with greater volatility. The sector benefits from strong tailwinds (increasing data volumes, AI adoption) but faces challenges including competition, changing technology standards, and the need for continuous innovation. Consider your risk tolerance and investment timeline when approaching this sector.

What are some key metrics to watch when evaluating data companies?

Beyond standard financial metrics, pay attention to customer retention rates (often reported as "net revenue retention"), as they indicate how satisfied customers are with these essential services. Growth in data processing volume or customers can signal expanding market share. For cloud providers, watch for margins in their cloud segments. For specialized players, monitor the adoption of their newest products and services, as innovation is critical. Finally, keep an eye on partnerships with other tech companies, which can create valuable ecosystems.

16 handpicked stocks

Data Chaos

In today's digital flood, these companies are the architects of order. Carefully selected by our analysts, this collection represents the essential businesses transforming overwhelming information into valuable insights through storage, management, and AI-powered analysis.

Han Tan | Market Analyst

Updated 2 days ago | Published at जून 18