We recently published a list of 10 High Growth IT Stocks To Invest In Now. In this article, we are going to take a look at where Data Storage Corp. (NASDAQ:DTST) stands against other high growth IT stocks to invest in now.
The global IT services market is experiencing significant growth and is on track to grow at a compound annual growth rate of 9.5% from 2024 to 2030, as estimated by Grand View Research. This expansion is particularly pronounced in developing economies such as India and China, driven by the increasing adoption of cloud computing and advanced digital technologies.
Growth in this industry is driven by several factors, including increasingly stringent data privacy regulations and heightened concerns over cybersecurity, compelling enterprises to invest heavily in robust IT solutions. The widespread adoption of advanced technologies such as artificial intelligence, machine learning, and the Internet of Things has further fueled market demand. As businesses across various industries embrace digital transformation, they are turning to IT service providers to meet their evolving needs. The shift towards remote and hybrid work models has necessitated robust IT infrastructure to ensure seamless operations, especially for large enterprises. Cloud computing has emerged as a key driver of market growth, enabling businesses to migrate their critical operations to the cloud and leverage IT services to securely manage these environments. Additionally, the increasing adoption of software-as-a-service models has led to a surge in IT expenditures, as organizations seek to streamline their business processes and focus on core competencies.
Is The Tech Sector Still Booming?
On November 13, Keith Lerner, Co-Chief Investment Officer at Truist Wealth, and Mark Malek, Chief Investment Officer at Siebert Financial, appeared on CNBC and highlighted their outlook for the tech sector outlook.
Lerner expressed a continued preference for technology stocks, particularly those involved in software development. He noted that software companies are increasingly automating processes and driving efficiency across various sectors. This trend positions them well for future growth, even if there are short-term fluctuations in the market. Lerner highlighted that despite any potential pullback due to rising yields or inflation concerns, he views software stocks as having strong leadership potential.
Malek concurred with Lerner’s positive outlook on technology but emphasized a selective investment approach within this sector. He pointed out that ongoing supply chain issues are affecting the chip industry, which could impact performance in certain areas of technology. However, he maintained that significant opportunities exist within the AI ecosystem and other technology-related fields.
As the global IT services market continues to expand at an impressive pace, driven by technological advancements and increasing digital adoption, information technology stocks may be well-positioned to go higher. Given this context, we’re here with a list of 10 high growth IT stocks to invest in now.
Our Methodology
We used Finviz to compile an initial list of IT stocks with high 5-year compound annual growth rates. From that list, we narrowed our choices to 10 high-growth IT stocks that analysts were the most bullish on. The stocks are ranked in ascending order of analysts’ upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A computer technician demonstrating a new high availability solution to a client.
Data Storage Corp. (NASDAQ:DTST)
5 Year Revenue CAGR: 25.23%
Average Upside Potential as of November 14: 121.14%
Data Storage Corp. (NASDAQ:DTST) is a leading provider of fully managed cloud hosting, disaster recovery, cybersecurity, IT automation, and voice & data solutions. It offers a comprehensive suite of multi-cloud IT solutions, including robust cybersecurity measures. It also provides data protection and recovery solutions. With a focus on industries like healthcare, financial services, manufacturing, and more, it empowers businesses to effectively manage and protect their critical data.
It announced its financial results for the third quarter of 2024, highlighting significant progress in its strategic initiatives. The company achieved profitability for both the quarter and the nine months leading to it, driven by a focus on high-margin recurring subscription revenue. While the revenue of $5.81 million was lower than Street estimates and also 2.97% lower than Q3 in 2023, there was an 8.7% increase in gross profit.
The company expanded its partnership with a major insurance firm to enhance its cloud infrastructure and cybersecurity capabilities. Additionally, it secured contracts with a leading medical center for compliant cloud hosting and a music publishing organization. To better serve its growing US customer base, it opened a new data center in Chicago. The company also expanded its global footprint by entering the UK market through the integration of Flagship Solutions and the appointment of Colin Freeman as Managing Director of UK Cloud Host Technologies Ltd., positioning it for accelerated growth in Europe.
With a strong financial position of approximately $11.9 million in cash and marketable securities and no long-term debt, Data Storage Corp. (NASDAQ:DTST) is well-positioned to capitalize on future growth opportunities. The company’s management expressed satisfaction with the progress made and reiterated its commitment to driving growth, enhancing profitability, and delivering value to shareholders.
Overall, DTST ranks 2nd on our list of high growth IT stocks to invest in now. As we acknowledge the growth potential of DTST, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DTST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.