Datadog Inc: A Rising Stock in the AI Wave

Opportunities of Datadog Inc. and the AI Wave

Recently published in the Top 10 Buzzing Stocks to Watch list, Datadog Inc (NASDAQ:DDOG) stands out as a noteworthy stock. Analyst Gil Luria from D.A. Davidson explained on a CNBC program how artificial intelligence contributes to companies like Datadog:

“This technology is not very suitable for business software. Business software is highly sensitive and has an integrated structure. There are workflows, permissions, and connections. It will take time for new AI software initiatives to disrupt application software companies. However, there are clear areas where the benefit is evident in software. Data needs to be aggregated in one place - this benefits Snowflake. You need to monitor all applications - this points to the strength of Datadog Inc (NASDAQ:DDOG). You're developing more code.”

D.A. Davidson has issued a Buy rating for Datadog Inc. with a price target of $180.

ClearBridge Large Cap Growth Strategy stated in its third quarter investment letter for Datadog: “Throughout the quarter, the strategy took new positions in infrastructure software providers Oracle and Datadog, Inc. (NASDAQ:DDOG) and contributed to Broadcom. Datadog offers a monitoring, observability, and data security platform for cloud applications. Observability is a growing market that requires more performance monitoring as application usage and complexity increase. Datadog is a leader in cloud application monitoring and provides ease of use, breadth, and scalability compared to its competitors. Large language model (LLM) observability is a rapidly growing market due to the acceleration of Gen AI workloads, creating a new area for growth.”

Datadog's critical mission delivery and rapid innovation support attractive revenue growth of over 20%. The company’s ability to scale margins and cash flow will shape its future with a valuable valuation.

We acknowledge the potential of DDOG as an investment, but we believe that some AI stocks hold greater promise for higher returns and limited downside risk. If you are particularly looking for an affordable AI stock, feel free to check out our short-term AI stock report on this topic.