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Tech Stock Hit Record High Amid Industry Plunge

earning cash from technology / investing in technology
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Wednesday, 06 February 2019 08:01 AM Current | Bio | Archive

Whether you’re aware of it or not, you generate a lot of data every day.

Every time you shop online, use your phone for driving directions, send an email, browse Facebook (FB), or watch YouTube… you create data that savvy companies turn into cash.

25 years ago, before any of this was around, the whole world generated just 100 gigabytes of data a day. That’s equal to downloading 30 HD movies.

Today, we generate roughly 4.3 billion gigabytes per day. That is a 4,300,000,000% explosion from 25 years ago!

Here’s how this incredible growth looks on a chart:

The driving force behind this mega-trend are powerful computer chips. That’s why I recommended two chip makers in my Great Disruptors special report. You can access your free copy here.

But let me back up a little bit…

Data Is the Most Valuable Resource

As regular RiskHedge readers know, today’s richest companies have made their fortunes collecting and interpreting data.

Amazon (AMZN), Google (GOOG), and Facebook are three of the largest, most powerful companies on earth. Data is the lifeblood of their businesses.

Take Amazon for example.

Did you know that one in every three items it sells comes from its “recommended for you” tab? This is where it offers you items you’re likely to buy based on your shopping history.

This one strategy alone generated $36 billion in sales last year! That’s more revenue than fast food giant McDonalds (MCD) earned.

Most Businesses Don’t Know How to Use Data

But while tech giants like Amazon and Google have figured out how to turn data into cash, most firms don’t have a clue how to use their data.

Many companies collect tons of raw data on their customers. But most don’t have the tools to make good use of it.

You see, data is like oil. When oil is first sucked out of the ground, it’s a raw, useless muck.

It only becomes useful when refined into gasoline to power our cars.

Like oil, a big blob of raw data does you no good. Data must be refined and analyzed into valuable information.

For this reason, this year alone, companies will spend at least $50 billion on data analysis.

Alteryx (AYX) Is Quietly Becoming a Top Data “Refiner”

Alteryx’s platform gives companies access to powerful data tools previously reserved for the likes of Amazon and Google.

Internet giant Cisco (CSCO), for example, is a happy Alteryx customer.

For Cisco, it would take seven days to track all the money the company was spending on things like research and development. Its well-paid data scientists were wasting 90% of their time tracking down data rather than analyzing it to gain insights.

Using Alteryx’s platform, Cisco slashed reporting time from seven days to 20 minutes.

And by freeing up its data scientists’ time, it cut expenses by about 4%.

How Alteryx Saved Southwest Airlines (LUV) $80 Million

Over 150 million people took a Southwest flight last year.

Southwest built an algorithm to identify which of them are likely to use its frequent flyer program, and so become a repeat customer.

For Southwest, it would take eight weeks to update this complicated model. Using Alteryx, Southwest automated the whole process and saved $80 million.

Alteryx’s Sales Have Exploded 140% in the Past Two Years

It went public in 2017. And in each of the past eight quarters, its sales have soared over 50%.

Alteryx has doubled its customer base since 2016. Today, it counts some of America’s biggest businesses as its clients, including Wells Fargo (WFC), T-Mobile (TMUS), Home Depot (HD), Nike (NKE), and McDonalds (MCD).

All of them are spending more and more money.

For every dollar a customer spent with Alteryx in 2017, it spent $1.30 in 2018. This puts its dollar “retention rate” at a world-class 130%.

For comparison, this crushes even mighty Apple’s 92% retention rate.

Alteryx Is an “Autopilot Stock”

If you’ve been reading RiskHedge you know why autopilot stocks are ideal investments. In short, they earn heaps of recurring cash by selling subscriptions.

Every one of Alteryx’s 4,300+ customers pay a monthly fee to access its platform. 95% of its sales come from selling subscriptions, giving it a constant stream of cash.

As publicly traded companies go, Alteryx is still small. It’s worth $4.4 billion—too small for inclusion in the S&P 500.

Meanwhile, it’s becoming a dominant player in the rapidly growing data analytics market. Leading research firm IDC estimates this market will be worth $81 billion in just three years.

This combination—small firms disrupting large markets—is exactly what we look for at RiskHedge. These are the kinds of stocks that could double or triple quickly and still have lots of room to grow.

Alteryx is on track to rake in around $200 million this year. My research suggests it should double its sales over the coming two years. That would bring its total sales to around $400 million in 2020.

If it achieves this sales growth, the stock should climb 100–200% by 2020.

Alteryx Stock Has Already Soared 155% In The Past Year—But It’s OK

It’s wise to be careful with any stock that’s run up so far so fast. But I’m comfortable taking a stake in Alteryx here.

As you likely know, US stocks had it rough over the past six months.

Many widely followed stocks were down big, including Apple (-25%) and Netflix (-16%).

Alteryx, meanwhile, is holding strong near its all-time highs:

As true disruptors often do, it’s sailed right through the selloff.

Have you Missed Out on Amazon, Google, and Netflix-level profits of 500%+? Here’s Your Second Chance

If you looking for stocks coiled for big gains, grab my recent special report The Great Disruptors: 3 Breakthrough Stocks Set to Double Your MoneyIn it, you’ll find in-depth research and exact stock tickers along with our buy prices and target prices—so you can invest confidently today. These stocks will hand you 100% gains as they disrupt whole industries. Claim your free copy here.

Stephen McBride is the editor of the RiskHedge Report, a popular and rapidly growing advisory dedicated to helping investors understand and profit from disruption.

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StephenMcBride
Alteryx is on track to rake in around $200 million this year. My research suggests it should double its sales over the coming two years. That would bring its total sales to around $400 million in 2020.
tech, stocks, freefall, all time, high
1030
2019-01-06
Wednesday, 06 February 2019 08:01 AM
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