10 AI Stocks on the Market’s Radar

7. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 103

Datadog, Inc. (NASDAQ:DDOG) is one of the 10 AI Stocks on the Market’s Radar. On October 8, Bernstein raised the firm’s price target on the stock to $170 from $147 and kept an “Outperform” rating on the shares.

The firm has seen Datadog rally after a mid-summer pullback, which isn’t a surprise as multiple signals imply that the second half of the year may experience a nice acceleration in base revenue ex-AI.

Investors are now less worried about Datadog losing business to OpenAI anytime soon- which makes the overall outlook positive.

“Strong H2 cloud consumption trends; Over the last few weeks we watched Datadog (and broader cloud-linked consumption software) rally after a mid-summer pullback. In many ways we are not surprised, as multiple signals suggest H2 might actually see nice acceleration in base revenue ex-AI. Add to that market sentiment that the worst case OpenAI churn scenario seems unlikely in the near term (consistent with our earlier calls) and there are reasons to turn optimistic. Based on our web metric analysis we increase our ex-AI component of growth for H2 and FY26–27 (AI component only tweaked slightly). Using a 50/50 “rule of 40”-based multiples regression (~15x Price to NTM revenue up from ~14x), and our DCF (11% WACC, 3% terminal growth) we raise our PT to $170 and maintain an Outperform rating.”

Datadog, Inc. (NASDAQ:DDOG) offers a cloud-based SaaS platform for monitoring and analytics, specializing in cloud computing and AI-powered cybersecurity products.