Undervalued Cloud Stocks: Five Hedge Funds' Picks

Based on their relative value, hedge funds think these five cloud stocks under $10 are undervalued.

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5. AvePoint, Inc. 

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Number of Hedge Funds: 14

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Founded in New Jersey, AvePoint Inc. offers solutions for moving, managing, and protecting data in Microsoft 365, one of the most popular cloud computing environments. The cloud platforms offered by AvePoint, Inc. (NASDAQ: AVPT) enable companies to manage and back up their data with significant cost savings. The company estimates that, on average, Cloud Backup customers with 5,000 users can save two dollars for every dollar spent compared to self-hosted backup.

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As one of the industry's highest client retention rates, AvePoint, Inc. (NASDAQ: AVPT) has a client retention rate of 100%. Compared to last year, AvePoint, Inc. (NASDAQ: AVPT) has seen a 16% jump in revenue for the third quarter. SaaS revenue grew by 34% during the period, and total ARR grew by 30%. In the period under review, there was a 30% increase in SaaS revenue.

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As a constant currency basis, the company expects its fourth-quarter revenue to be $63 million to $65 million.

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Insider Monkey tracked 14 hedge funds, and 14 hedge funds held stakes in AvePoint, Inc. (NASDAQ: AVPT) at the end of the third quarter of 2022. These stakes were worth over $36 million.

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4. WM Technology, Inc. 

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Number of Hedge Funds: 15

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As a provider of e-commerce services and e-commerce platforms for the cannabis industry, WM Technology, Inc. (NASDAQ: MAPS) is one of the top companies. In addition to offering software-as-a-service (SaaS) and data solutions to the weed industry, WM Technology, Inc. (NASDAQ: MAPS) is also a cloud-based software-as-a-service provider.

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The company, known as WM Technology, Inc. (NASDAQ: MAPS), acquired the industry's leading marketing and CRM platform, Sprout, in 2021.

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From the end of the third quarter of 2022, 15 hedge funds tracked by Insider Monkey reported owning shares of WM Technology, Inc. (NASDAQ: MAPS). It is believed that Rima Senvest Management has been the largest shareholder of WM Technology, Inc. (NASDAQ: MAPS) during this period. These shares had a net worth of approximately $27 million at the time of purchase. Mashaal controls the company and owns a stake worth approximately $12 million.

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3. Information Services Group, Inc. 

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Number of Hedge Funds: 15

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In addition to providing a broad range of IT services, Information Services Group, Inc. (NASDAQ: III) specializes in cloud migration, cloud performance optimization, and digital asset protection. Besides providing IT services, it also offers some other services.

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Despite being a small company, Information Services Group, Inc. (NASDAQ: III) pays dividends.

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In the third quarter, Information Services Group, Inc. (NASDAQ: III) achieved an adjusted EBITDA margin of 16%, a record-high mark in the company's history. In the fourth quarter, Information Services Group, Inc. (NASDAQ: III) is expected to achieve this figure between 14.5% and 15%.

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In the third quarter of 2022, 15 hedge funds owned stakes in Information Services Group, Inc. (NASDAQ: III) among the 920 hedge funds tracked by Insider Monkey. This stake is estimated to have been worth about $38 million in value at the end of the period. As of the end of this period, Gregg J. Powers' Private Capital Management owned $19.3 million in Information Services Group, Inc. (NASDAQ: III) and was the company's largest shareholder.

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2. Zeta Global Holdings Corp. 

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Number of Hedge Funds: 18

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In addition to providing data-driven marketing technologies, Zeta Global Holdings Corp. (NYSE: ZETA) operates a cloud platform, Zeta Data, which processes data from approximately 235 million opted-in individuals in the United States and over 525 million opted-in individuals worldwide. Based on this data, Zeta Global Holdings Corp. (NYSE: ZETA)'s platform uses important personal information (PII) like names, addresses, and emails along with digital identifiers like cookies, MAIDs, and device IDs. Marketers can use this information to optimize the results of their marketing campaigns by making data-driven decisions.

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Zeta Global Holdings Corp. (NYSE: ZETA) was the subject of 18 hedge funds' reports at the end of the third quarter of 2022, according to Insider Monkey.

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1. Rimini Street, Inc. 

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Number of Hedge Funds: 18

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Nevada-based Rimini Street, Inc. (NASDAQ: RMNI) manufactures software. Rimini Street (NASDAQ: RMNI) offers customers consultancy services regarding Cloud migration, Cloud security, performance, interoperability, and data integration through its Cloud operations. In addition to Cloud-based ERP solutions, Rimini Street, Inc. (NASDAQ: RMNI) provides these solutions to customers.

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The Rimini Street, Inc. (NASDAQ: RMNI) shares have gained about 18% since the year began. The total value of these stakes was $130.3 million. 18 hedge funds in the 920 hedge funds tracked by Insider Monkey owned Rimini Street, Inc. (NASDAQ:RMNI) as of the third quarter of 2022. A stake worth about $110 million was owned by Jeffrey Diehl's Adams Street Partners in Rimini Street Inc. (NASDAQ:RMNI).