Despite the major indices reaching fresh highs, I’ve consistently encouraged my readers to think about the bigger picture. Of course, I understand the basic concerns about not wanting to hold the bag. But with the convergence of paradigm-shifting technologies, there’s no better time to invest in transformative names like Splunk (NASDAQ:SPLK). Leveraging big data across a variety of applications, Splunk stock has a very viable runway.
But perhaps the best way to explain Splunk is to reference a classic board game: chess. For centuries, aristocrats used the game to match wits against each other. Eventually, it evolved into a sporting league, with chess masters competing for global dominance and recognition.
Now, chess appeals because of its emphasis on strategy and cunning, not so much on brute-force reactions and athleticism. Thus, the game casts a wide net, which later included non-human players.
Initially, digital chess players were outsmarted by their human counterparts. However, in 1997, International Business Machine’s (NYSE:IBM) Deep Blue defeated then-world champion Garry Kasparov in a six-game match. Then, in 2006, a program called Deep Fritz bested world champ Vladimir Kramnik.
Today, it’s no longer unusual for a machine to defeat man in his own backyard. Advanced artificial intelligence protocols can run multiple permutations in seconds. And when the variables change, AI platforms can rerun the permutations, staying well ahead of mere mortals’ intellectual capacity.
In other words, the processing of big data sparked a breakthrough in the game of chess. In a similar fashion, Splunk wishes to do the same for the four pillars of modern business: IT operations, security, internet of things and analytics. This has resulted in massive interest toward Splunk stock, and it will likely continue.
Making Digitalization Practical
In prior generations’ use of AI, applications were limited. Although Deep Blue laid the groundwork for what was possible, most businesses had no use for a chess-playing computer. More to the point, the game has strict rules and sequences. Comparatively, the algorithms back then were simplistic.
Fast forward to today, technology firms are increasingly using AI platforms for multiple, dynamic purposes. What makes Splunk stock stand out from this crowded space, though, is that the underlying company emphasizes actionable insights. Stated differently, SPLK makes digitalization practical for its clients.
One of the company’s most powerful services is its business analytics division. Before the integration of big data analytics, companies could only rely on historical data to determine whether their initiatives were resonating with their customers. However, Splunk’s platform allows clients to understand what’s occurring in real time.
For instance, if a social media campaign is running flat, SPLK clients can better determine causes, and adjust as needed. In addition, the company offers a “Data-to-Everything Platform,” which allows clients to understand how complex and disparate parts work together to create certain results.
Here, Splunk’s pattern recognition algorithms can parse the granularity, providing critical insights into human language. This gives managers clear signals to where inefficiencies lie, facilitating better streamlining of resources for superior outcomes.
What really drives the case home for Splunk stock is that every company nowadays relies on data. Therefore, many of SPLK’s clients aren’t tech firms, but cut across multiple industries. Domino’s Pizza (NYSE:DPZ) is a Splunk client, as is airplane manufacturer Airbus (OTCMKTS:EADSY) and automaker Porsche (OTCMKTS:POAHY).
While these companies are unrelated, they all have customers. And they respond to certain initiatives better than others. Splunk helps find what those initiatives are, ultimately boosting the bottom line.
Splunk Stock and the 5G Rollout
As my readers know, I’ve pounded the table on the 5G rollout and its positive implications for investors. Although the headline narrative focuses on wireless speeds, 5G is much more than rapid-fire uploads and downloads. Instead, this innovation creates a springboard for other technologies: We’re talking AI, IOT, self-driving vehicles and smart cities, to name but a few.
Naturally, 5G will create an explosion of data. But data alone isn’t what will move society forward. You must have some way to convert this data into meaningful, actionable advice. Again, this is at the heart of the investment thesis for Splunk stock.
Plus, any new technology invites bad actors to exploit it — that’s just human nature. But even here, Splunk’s Data-to-Everything Platform presents an effective solution. With algorithms constantly on the prowl for aberrant and therefore potentially threatening patterns, Splunk’s clients can proactively respond to risks rather than merely reacting to them.
Essentially, SPLK is a one-stop shop for all your data needs. With such simplicity and effectiveness, I predict a long upside pathway for Splunk stock.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and+1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.