With the rout in the stock market, investors are looking for things that will bounce back quickly. One obvious place to go looking is in the big data stocks. Coming into 2020, these companies were delivering stellar results. And now, the coronavirus serves as a potential catalyst to help them recover quickly.
The current outbreak caught the world flat-footed. Vast chunks of the medical system were not adequately prepared. With the aging of the population in particular, authorities must upgrade hospital systems to avoid similar catastrophes in the future.
Big data can play an integral role in this. By making the medical system more efficient, artificial intelligence can help governments and companies make more of the resources they already have. In addition, investments in IT can, in many cases, be more effective than other approaches. Investorplace spoke via e-mail with University of Connecticut Business Professor Sudip Bhattacharjee, Ph.D., about how tech companies are using big data amid the coronavirus pandemic. Bhattacharjee said:
“Big Data and AI can heal, steal or kill – depending on how its used. China and South Korea have used Big Data and AI techniques heavily to track movement of infected persons. In general, such techniques can be used in the following ways:
- Airline manifests — clusters of nearby passengers can identify potential contamination in confined spaces.
- GPS coordinates of persons using mobile phone information. This is a very powerful method, where precise location and path followed by infected and potential persons can be tracked, and congregations and movement of people can be re-created.
- Facial identification can be used as a complement to GPS movement re-creation.
- Travel document scanning and comparison to understand movement of people across geographies.”
This offers many advantages compared to traditional methods. Humans simply aren’t that good at containing viruses on their own. Bhattacharjee explained:
“The upshot of using such Big Data and AI technology is that humans may not always remember their travel and precise paths. Big Data techniques can easily and quickly help to pinpoint movement of infected and other people in crowded places. It also requires fewer resources, during an emergency, to identify and track movement. This process can help to quickly isolate or contain a contagious outbreak.”
Bhattacharjee warns, however, that there needs to be more clarity on data sharing. Privacy is a major concern. In some Asian countries in particular, there are more codified rules on these fronts. This helped countries such as Taiwan stop the virus in its tracks using big data. However, Bhattacharjee warned that the U.S. is behind the curve on data sharing as it relates to disease tracking, saying: “While there are examples of such Big Data and AI techniques in other countries, there is very little evidence of this approach in the U.S.”
So what’s an investor to make of all this? Certainly it’s worth looking at big data stocks in Asia that have already shown expertise in the healthcare sector. And while the U.S. is lagging the field now, don’t count out America’s leading tech companies either. Here are seven big data firms to have on your radar as the world fights the coronavirus pandemic.
Big Data Stocks Fighting Coronavirus: IBM (IBM)
IBM (NYSE:IBM) is a clear play on data, particularly within the healthcare space. The company is famous for Watson, its Artificial Intelligence technology with a wide range of applications across the medical industry. From detecting cancers to optimizing health data tracking and many other things, Watson can make a huge impact across the sector.
More specifically, IBM has entered the fight against the coronavirus directly. The Trump Administration recently announced that IBM has partnered with the White House to create the IBM Summit super-computing system.
This network allows rapid-fire calculations. According to IBM’s head of research, Summit allows “researchers to run very large numbers of calculations in epidemiology, bioinformatics, and molecular modeling,” quickly, when these tasks would take months or years via other methods. Already, the government is using IBM’s computing systems to test possible compounds to cripple the coronavirus. While IBM isn’t getting as much limelight as some of the drug companies, it’s playing a central role in the nation’s fight against the pandemic.
JD.com (NASDAQ:JD) is best-known for its e-commerce platform. But like many emerging tech companies in China, JD has a lot more going on beyond its core business.
Included in that is JD Health. Of the 2019 class of newly-minted tech unicorns, JD Health became the second-most valuable as it successfully raised funds at a $7 billion valuation. That made it the second-best of the year, trailing only Uber’s (NYSE:UBER) advanced technology unit subsidiary.
And it shouldn’t be surprising that JD Health is attracting substantial investor interest. Sure, the business at its heart is a standard e-commerce platform, serving, in effect, as an online pharmacy.
That’s a large, if relatively mundane, market. However, JD Health is doing a ton of stuff to build a broader platform, such as providing customers access to genetic testing.
It also has data-driven operations in areas such as wholesale drug buying, and web-based hospital services. JD is well on its way toward becoming a one-stop healthcare shop.
I’m not a huge fan of Alibaba (NYSE:BABA) in general. The company has complex accounting and has many moving pieces that make analysis more complicated. That said, if you’re talking about big data stocks with a healthcare angle, Alibaba is clearly part of the discussion.
Alibaba has earned praise for relief efforts during the coronavirus outbreak. It has offered no charge medical consultations to Chinese citizens that are overseas during the outbreak. Alibaba founder Jack Ma has also donated tons of medical equipment to the fight against the virus.
In addition to Alibaba’s efforts at the parent level, it also has its Alibaba Health Information Technology. Alibaba’s health information company is not listed in the United States, however it is publicly-traded in Hong Kong. Its shares there have soared from 4 Hong Kong Dollars in 2018 to as much as 16 HKD earlier this year, and the company now carries a 150 billion HKD market capitalization (approximately $19 billion USD at time of writing).
Shares soared in particular during the coronavirus outbreak, seemingly showing the impact of Alibaba’s big data approach to tackling problems including pressing medical needs. The company has made partnerships with big-name firms such as Merck (NYSE:MRK) that help establish its credibility as an emerging star in the field. While investors primarily own Alibaba for its commerce and cloud businesses, the health care business could surprise folks as well.
It’s not just the Chinese internet giants that are interested in the healthcare space. Alphabet (NASDAQ:GOOGL) is an obvious leader among the big data stocks and is increasingly making its move in the medical system.
Google gets high-profile attention for some of its healthcare-related ventures. For example, sister company Verily recently helped the White House create a website that shows people where to find coronavirus testing kits. The big play for Google in medicine, however, is assembling all the data it already has on users and figuring out new ways to improve user experience with that information.
The possibilities are already amazing, and will only continue to grow. Google’s proposed acquisition of FitBit (NYSE:FIT), for example, would give Google a trove of personal medical data. Who knows what Google’s data scientists will be able to accomplish in coming years as they analyze all this information through some of the world’s most advanced algorithms.
Google will need to act quickly, because it’s far from the only American tech giant making an entrance into the healthcare arena. Amazon (NASDAQ:AMZN) hasn’t made its plans for the sector entirely clear, but it certainly has something in mind.
Over the years, there were rumors that Amazon would make a big splash into brick and mortar pharmacies to complement its Whole Foods acquisition. This hasn’t happened yet. However, Amazon has ambitions in the online pharmacy space. And we’re seeing that start to bear fruit during the current viral outbreak.
Amazon recently launched a service to deliver and pick up coronavirus at-home testing kits. This should help reduce the spread of the disease while making life easier for patients that are already suffering from severe symptoms. Amazon is also a founding member of the COVID-19 Healthcare Coalition.
More broadly, expect Amazon to continue to use its scale and vast troves of data to build out a powerful healthcare infrastructure. Its leadership in the home speaker market could be a particular edge. Amazon could develop an unmatched knowledge of its clients through Alexa and other voice-powered means. This, in turn, could enable Amazon to become the one-stop digital pharmacy in coming years.
Cerner (NASDAQ:CERN) is another big data stock focused directly on healthcare. It provides software systems and other related services to hospitals and other medical facilities. It currently has more than 27,000 clients in dozens of countries around the globe. As you can imagine, with that level of access, it is one of the most direct and biggest plays on big data within the healthcare space.
Adding to that, Cerner recently acquired AbleVets. AbleVets launched in 2012 to offer healthcare consulting and information services to the federal government. It focuses on key needs including cybersecurity and data analytics.
You can be sure that after the uneven response to the coronavirus, the government will be authorizing far more funds to these efforts in coming years. Companies like Cerner will stand to benefit as the federal government shores up its capabilities here going forward.
The stock has fallen from record highs to 52-week lows in recently, with the share price sliding from $80 to less than $60. That means that Cerner is now selling for less than 20x forward earnings. And unlike so many companies, the coronavirus does nothing to change demand for Cerner’s mission-critical solutions.
Cognizant Technology Solutions (CTSH)
Cognizant Technology Solutions (NASDAQ:CTSH) is a diversified play on information technology spending. As companies ramp up their efforts in big data, they need more and more tools to support their IT systems. Cognizant is set to profit as this trend accelerates.
The company is by no means a pure-play on healthcare. It has three major business lines: financial services, healthcare and logistics and manufacturing. Overall, analysts forecast that the global technology consulting market will grow at nearly 12% annually in coming years, giving a huge headwind for firms like Cognizant.
Also, of note, it gets more than 80% of its revenues from the United States, differentiating it from IBM and Asian-based rivals that are more exposed to international markets. It seems highly probable that the U.S. will spend huge sums of money to bring its healthcare systems up-to-date after getting blindsided by the coronavirus. Cognizant, as a U.S.-focused player specializing in healthcare, should be a winner.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. At the time of this writing, he owned shares of JD and IBM stock.