10 Best Data Infrastructure for January 2026
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Market Overview & Selection Criteria
The data infrastructure sector within technology continues to drive innovation amid surging demand for cloud computing, AI analytics, and big data processing. ValueSense analysis highlights companies with strong revenue growth, high gross margins, and attractive intrinsic value estimates relative to market caps, even as some face profitability challenges or debt loads. These top 10 data infrastructure stock picks were selected using ValueSense's proprietary screener criteria: Quality rating above 5.0, positive revenue growth where possible, robust gross margins over 60%, and intrinsic value suggesting undervaluation potential. Metrics like ROIC, FCF margins, and debt-to-equity provide a balanced view for educational analysis, focusing on long-term value opportunities in this high-growth niche.
Featured Stock Analysis
Stock #1: Oracle Corporation (ORCL)
| Metric | Value |
|---|---|
| Market Cap | $557.8B |
| Quality Rating | 6.1 |
| Intrinsic Value | $168.0 |
| 1Y Return | 18.2% |
| Revenue | $61.0B |
| Free Cash Flow | ($13.2B) |
| Revenue Growth | 11.1% |
| FCF margin | (21.6%) |
| Gross margin | 78.0% |
| ROIC | 13.1% |
| Total Debt to Equity | 408.4% |
Investment Thesis
Oracle Corporation (ORCL) stands out as a data infrastructure leader with a massive $557.8B market cap and steady 11.1% revenue growth to $61.0B. Despite a negative Free Cash Flow of $13.2B and FCF margin of 21.6%, its 78.0% gross margin and 13.1% ROIC reflect operational strength in cloud and database services. The Quality rating of 6.1 pairs with an intrinsic value of $168.0, indicating potential undervaluation for value-focused analysis. One-year return of 18.2% shows resilience, though high Total Debt to Equity at 408.4% warrants monitoring amid scaling investments.
Key Catalysts
- Dominant position in enterprise databases fueling cloud migration trends
- High gross margin 78.0% supporting margin expansion as revenue scales
- Revenue growth 11.1% from AI-integrated data solutions
Risk Factors
- Negative FCF $13.2B due to heavy capex in cloud infrastructure
- Elevated Total Debt to Equity 408.4% increasing financial leverage risk
- Slower growth compared to pure-play cloud peers
Stock #2: Palantir Technologies Inc. (PLTR)
| Metric | Value |
|---|---|
| Market Cap | $402.7B |
| Quality Rating | 8.1 |
| Intrinsic Value | $21.4 |
| 1Y Return | 123.2% |
| Revenue | $3,896.2M |
| Free Cash Flow | $1,794.8M |
| Revenue Growth | 47.2% |
| FCF margin | 46.1% |
| Gross margin | 80.8% |
| ROIC | 76.6% |
| Total Debt to Equity | 3.5% |
Investment Thesis
Palantir Technologies Inc. (PLTR) boasts a $402.7B market cap and exceptional 47.2% revenue growth to $3,896.2M, with $1,794.8M Free Cash Flow yielding a stellar 46.1% FCF margin. Its Quality rating of 8.1—the highest in this watchlist—aligns with 80.8% gross margin and explosive 76.6% ROIC, underscoring AI-driven data platform efficiency. However, intrinsic value at $21.4 suggests caution on valuation, despite a blockbuster 123.2% 1Y return. Low Total Debt to Equity 3.5% enhances balance sheet strength for sustained expansion.
Key Catalysts
- Hyper-growth revenue 47.2% from government and enterprise AI contracts
- Top-tier ROIC 76.6% and FCF margin 46.1% signaling profitability inflection
- Minimal debt 3.5% enabling agile capital deployment
Risk Factors
- Potentially stretched valuation relative to intrinsic value $21.4
- Dependence on large contracts for revenue acceleration
- High market cap volatility in AI hype cycles
Stock #3: Snowflake Inc. (SNOW)
| Metric | Value |
|---|---|
| Market Cap | $72.3B |
| Quality Rating | 6.3 |
| Intrinsic Value | $78.8 |
| 1Y Return | 37.6% |
| Revenue | $4,386.7M |
| Free Cash Flow | $776.7M |
| Revenue Growth | 28.5% |
| FCF margin | 17.7% |
| Gross margin | 67.1% |
| ROIC | (58.0%) |
| Total Debt to Equity | 122.0% |
Investment Thesis
Snowflake Inc. (SNOW), with a $72.3B market cap, delivers 28.5% revenue growth to $4,386.7M and $776.7M Free Cash Flow (17.7% FCF margin). Quality rating of 6.3 supports its cloud data warehousing leadership, backed by 67.1% gross margin, though 58.0% ROIC highlights investment phase challenges. Intrinsic value of $78.8 points to undervaluation potential, with 37.6% 1Y return amid 122.0% Total Debt to Equity.
Key Catalysts
- Strong revenue growth 28.5% in multi-cloud data platform adoption
- Improving FCF $776.7M as scale reduces cash burn
- High gross margin 67.1% for long-term profitability
Risk Factors
- Negative ROIC (58.0%) from ongoing platform investments
- Moderate debt load (122.0%) in competitive cloud market
- Execution risks in expanding enterprise customer base
Stock #4: Datadog, Inc. (DDOG)
| Metric | Value |
|---|---|
| Market Cap | $46.4B |
| Quality Rating | 7.0 |
| Intrinsic Value | $43.3 |
| 1Y Return | -6.9% |
| Revenue | $3,211.7M |
| Free Cash Flow | $939.8M |
| Revenue Growth | 26.6% |
| FCF margin | 29.3% |
| Gross margin | 79.9% |
| ROIC | (4.4%) |
| Total Debt to Equity | 37.2% |
Investment Thesis
Datadog, Inc. (DDOG) features a $46.4B market cap, 26.6% revenue growth to $3,211.7M, and robust $939.8M Free Cash Flow (29.3% FCF margin). Quality rating of 7.0 complements 79.9% gross margin, despite 4.4% ROIC and -6.9% 1Y return. Intrinsic value at $43.3 suggests value opportunity in observability tools, with low 37.2% Total Debt to Equity.
Key Catalysts
- Consistent revenue growth 26.6% from cloud monitoring demand
- Strong FCF margin 29.3% and gross margin 79.9%
- Expanding platform for AI infrastructure monitoring
Risk Factors
- Negative ROIC (4.4%) amid R&D spend
- Recent 1Y return decline -6.9% signaling market pressures
- Competition in observability space
Stock #5: MongoDB, Inc. (MDB)
| Metric | Value |
|---|---|
| Market Cap | $32.5B |
| Quality Rating | 6.0 |
| Intrinsic Value | $220.3 |
| 1Y Return | 63.4% |
| Revenue | $2,317.1M |
| Free Cash Flow | $358.4M |
| Revenue Growth | 20.9% |
| FCF margin | 15.5% |
| Gross margin | 71.6% |
| ROIC | (23.1%) |
| Total Debt to Equity | 1.2% |
Investment Thesis
MongoDB, Inc. (MDB) holds a $32.5B market cap with 20.9% revenue growth to $2,317.1M and $358.4M Free Cash Flow (15.5% FCF margin). Quality rating of 6.0 aligns with 71.6% gross margin, but 23.1% ROIC reflects growth investments. Intrinsic value of $220.3 indicates significant undervaluation, supported by 63.4% 1Y return and minimal 1.2% Total Debt to Equity.
Key Catalysts
- Revenue growth 20.9% in NoSQL database for modern apps
- Attractive intrinsic value $220.3 vs. current pricing
- Near-zero debt 1.2% for flexible growth
Risk Factors
- Negative ROIC (23.1%) from scaling costs
- Volatility in developer adoption trends
- Competition from open-source alternatives
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Stock #6: Nutanix, Inc. (NTNX)
| Metric | Value |
|---|---|
| Market Cap | $13.5B |
| Quality Rating | 7.1 |
| Intrinsic Value | $91.9 |
| 1Y Return | -17.4% |
| Revenue | $2,617.5M |
| Free Cash Flow | $772.8M |
| Revenue Growth | 17.4% |
| FCF margin | 29.5% |
| Gross margin | 87.0% |
| ROIC | 24.5% |
| Total Debt to Equity | (221.4%) |
Investment Thesis
Nutanix, Inc. (NTNX) sports a $13.5B market cap, 17.4% revenue growth to $2,617.5M, and impressive $772.8M Free Cash Flow (29.5% FCF margin). Quality rating of 7.1 shines with 87.0% gross margin and 24.5% ROIC, though -17.4% 1Y return and negative 221.4% Total Debt to Equity add caution. Intrinsic value at $91.9 highlights potential.
Key Catalysts
- Highest gross margin 87.0% in hyperconverged infrastructure
- Positive ROIC 24.5% and FCF strength
- Hybrid cloud demand driving subscriptions
Risk Factors
- Negative equity from Total Debt to Equity (221.4%)
- Lagged 1Y return -17.4%
- Transition risks to profitability
Stock #7: Dynatrace, Inc. (DT)
| Metric | Value |
|---|---|
| Market Cap | $12.7B |
| Quality Rating | 6.9 |
| Intrinsic Value | $32.1 |
| 1Y Return | -22.1% |
| Revenue | $1,852.5M |
| Free Cash Flow | $476.1M |
| Revenue Growth | 18.5% |
| FCF margin | 25.7% |
| Gross margin | 81.5% |
| ROIC | 25.0% |
| Total Debt to Equity | 3.1% |
Investment Thesis
Dynatrace, Inc. (DT) has a $12.7B market cap, 18.5% revenue growth to $1,852.5M, and $476.1M Free Cash Flow (25.7% FCF margin). Quality rating of 6.9 matches 81.5% gross margin and 25.0% ROIC, with low 3.1% Total Debt to Equity, despite -22.1% 1Y return. Intrinsic value of $32.1 offers analysis angle.
Key Catalysts
- Solid ROIC 25.0% in observability and security
- High FCF margin 25.7% for reinvestment
- AI-powered platform differentiation
Risk Factors
- Weak 1Y return -22.1% amid macro headwinds
- Growth moderation risks
- Competitive AIOps landscape
Stock #8: Confluent, Inc. (CFLT)
| Metric | Value |
|---|---|
| Market Cap | $10.4B |
| Quality Rating | 5.0 |
| Intrinsic Value | $30.5 |
| 1Y Return | 6.6% |
| Revenue | $1,113.1M |
| Free Cash Flow | $53.5M |
| Revenue Growth | 21.6% |
| FCF margin | 4.8% |
| Gross margin | 74.1% |
| ROIC | (62.7%) |
| Total Debt to Equity | 98.9% |
Investment Thesis
Confluent, Inc. (CFLT) features $10.4B market cap, 21.6% revenue growth to $1,113.1M, but modest $53.5M Free Cash Flow (4.8% FCF margin). Lowest Quality rating 5.0 reflects 62.7% ROIC, offset by 74.1% gross margin and 6.6% 1Y return. Intrinsic value $30.5 and 98.9% Total Debt to Equity provide balanced view.
Key Catalysts
- Kafka-based streaming growth (21.6% revenue)
- Improving FCF trajectory
- Real-time data pipeline demand
Risk Factors
- Poor ROIC (62.7%) and low FCF margin 4.8%
- Highest relative debt (98.9%)
- Path to scale profitability
Stock #9: Commvault Systems, Inc. (CVLT)
| Metric | Value |
|---|---|
| Market Cap | $5,512.4M |
| Quality Rating | 7.0 |
| Intrinsic Value | $77.8 |
| 1Y Return | -18.4% |
| Revenue | $1,095.8M |
| Free Cash Flow | $209.4M |
| Revenue Growth | 22.0% |
| FCF margin | 19.1% |
| Gross margin | 81.5% |
| ROIC | 14.4% |
| Total Debt to Equity | 431.7% |
Investment Thesis
Commvault Systems, Inc. (CVLT) at $5,512.4M market cap shows 22.0% revenue growth to $1,095.8M and $209.4M Free Cash Flow (19.1% FCF margin). Quality rating 7.0 pairs with 81.5% gross margin and 14.4% ROIC, despite -18.4% 1Y return and 431.7% Total Debt to Equity. Intrinsic value $77.8 suggests upside.
Key Catalysts
- Accelerating revenue growth 22.0% in cyber resilience
- Healthy ROIC 14.4% and margins
- Data protection market tailwinds
Risk Factors
- High debt 431.7% straining balance sheet
- Negative 1Y return -18.4%
- Acquisition integration risks
Stock #10: Teradata Corporation (TDC)
| Metric | Value |
|---|---|
| Market Cap | $2,824.6M |
| Quality Rating | 6.0 |
| Intrinsic Value | $80.3 |
| 1Y Return | -3.2% |
| Revenue | $1,651.0M |
| Free Cash Flow | $305.0M |
| Revenue Growth | (8.2%) |
| FCF margin | 18.5% |
| Gross margin | 59.0% |
| ROIC | 18.9% |
| Total Debt to Equity | 261.6% |
Investment Thesis
Teradata Corporation (TDC) rounds out with $2,824.6M market cap, declining 8.2% revenue growth to $1,651.0M, but positive $305.0M Free Cash Flow (18.5% FCF margin). Quality rating 6.0 supports 18.9% ROIC and 59.0% gross margin, with -3.2% 1Y return and 261.6% Total Debt to Equity. Intrinsic value $80.3 flags potential.
Key Catalysts
- Stable FCF $305.0M and ROIC 18.9%
- Analytics platform modernization
- Cost discipline improving margins
Risk Factors
- Revenue contraction (8.2%) signaling market share loss
- Elevated debt 261.6%
- Legacy business transition
Portfolio Diversification Insights
These 10 data infrastructure stocks cluster in technology, offering diversification across sub-themes like databases (ORCL, MDB), AI platforms (PLTR), cloud warehousing (SNOW), observability (DDOG, DT), and storage (NTNX, CVLT, TDC). Large caps (ORCL, PLTR) provide stability, mid-caps (SNOW, DDOG) growth, and smaller names (CFLT, TDC) higher upside potential. Sector allocation is 100% tech/data infra, balancing high ROIC leaders (PLTR, NTNX) with undervalued plays (MDB, NTNX). Pair high-debt names (ORCL, CVLT) with low-debt (PLTR, MDB) for risk mitigation; average Quality rating ~6.6 emphasizes quality amid growth.
Market Timing & Entry Strategies
Consider positions during sector pullbacks, such as post-earnings dips or AI hype corrections, targeting stocks where current prices trail intrinsic value (e.g., MDB at $220.3, NTNX at $91.9). Dollar-cost average into high-conviction names like PLTR for momentum or ORCL for stability. Monitor revenue growth >20% and improving FCF margins as entry signals; use ValueSense charting for ROIC trends vs. peers. Scale in on weakness in laggards like DT or TDC if debt metrics stabilize.
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FAQ Section
How were these stocks selected?
These top 10 data infrastructure stock picks were curated via ValueSense screener focusing on Quality rating >5.0, high gross margins, revenue momentum, and intrinsic value upside, emphasizing educational fundamental analysis.
What's the best stock from this list?
Palantir (PLTR) leads with 8.1 Quality rating, 76.6% ROIC, and 123.2% 1Y return, though "best" depends on risk tolerance—compare via ValueSense tools for personalized insights.
Should I buy all these stocks or diversify?
Diversification across large/mid/small caps (e.g., ORCL for stability, MDB for growth) reduces sector-specific risks; analyze portfolio allocation using ValueSense watchlists rather than concentrating.
What are the biggest risks with these picks?
Key concerns include high debt (ORCL 408.4%, CVLT 431.7%), negative ROIC (SNOW -58.0%, CFLT -62.7%), and revenue volatility (TDC -8.2%); monitor via health ratings on ValueSense.
When is the best time to invest in these stocks?
Optimal entry during market dips when prices approach intrinsic value (e.g., SNOW $78.8), paired with positive FCF trends—use ValueSense backtesting for timing strategies.