Every investor wants to find the next "big" stock that will burst onto the scene in 2023. But two stocks I think have this potential aren't newly listed IPO stocks -- you can buy them right now.

Veeva Systems (VEEV -0.62%) and DigitalOcean (DOCN 2.32%) are both flying under many investors' radar. Each has had a solid 2022, but their stocks haven't performed very well, with Veeva down 34% and DigitalOcean down 65% this year. However, 2023 is shaping up to be a great year for each company, and it could land these stocks on everyone's radar. 

Veeva Systems

Veeva Systems is a crossover between a healthcare company and a tech company. It's split into two primary segments: R&D (research and development) solutions and commercial solutions. R&D solutions are primarily defined by its Veeva Vault platform, which allows biotech companies to track clinical data and ensure all regulatory standards are met.

The commercial solution product is a standard customer relationship management (CRM) product geared toward the medical field. It has tools like marketing analytics, data analysis, and customer engagement. Combined, these two solutions make a powerful platform. They are also fairly even in revenue makeup, but R&D solutions are growing much faster.

Segment Q3 FY 2023 Revenue Revenue Makeup YOY Growth
Commercial solutions $239 million 54% 7%
R&D solutions $202 million 46% 28%

Data source: Veeva Systems. Note: Q3 FY 2023 ended Oct. 31, 2022. YOY = year-over-year.

Combined, Veeva grew its revenue by 16% year over year in the third quarter. It also grew responsibly, as Veeva Systems is a profitable company. In Q3, it produced earnings per share of $0.70, slightly up from $0.69 last year. Veeva's internal R&D expenses rose 32%, which significantly contributed to this minuscule rise, but it shows Veeva is still innovating to capture what it believes is a $13 billion market.

With the stock trading at 13 times sales, it does have a slightly premium valuation. However, it earned this premium through consistent execution (Veeva Systems have never grown at less than a 15% YOY pace in its nearly a decade as a public company). I think 2023 will be a solid year for Veeva, and investors need to have this company on their watchlists.

DigitalOcean

When investing in the tech space, it doesn't take long to hear about cloud computing. However, this conversation is usually centered around giants like Microsoft Azure or Alphabet's Google Cloud. These giants focus on large businesses because they sign massive contracts.

DigitalOcean isn't concerned with winning huge contracts -- it's centered on smaller customers. As a result, DigitalOcean's cloud computing offering is tailored to individual developers and small businesses, and its pricing backs up this claim. 

Provider Monthly Cost Without Bandwidth Monthly Cost With Bandwidth
DigitalOcean $48 $48
Google Cloud $55.09 $480.09
Microsoft Azure $60.74 $452.74

Chart by author. Data source: DigitalOcean.

Is DigitalOcean going to win massive enterprise-sized contracts? No. But, with more than 142,000 customers paying at least $50 a month, it has strength in numbers. It also means DigitalOcean isn't dependent on winning a few contracts, as the business needs to trend in the correct direction. With revenue growing 37% year over year to $152 million, I'd say it's trending that way.

Unlike Veeva, DigitalOcean isn't fully profitable. However, it is free cash flow positive and produced $22.4 million in the third quarter -- a 15% margin. With only $23.6 million in stock-based compensation, DigtialOcean doesn't have a huge gap to close regarding how it pays its employees.

The long-term trend toward a cloud computing-based economy isn't slowing anytime soon. DigitalOcean is a great way to play this shift, and with the stock trading for a mere 6 times sales, it's also a great value.

DigitalOcean has a great future ahead, and 2023 could be a breakout year for it.