10 AI Stocks on Wall Street’s Radar: Datadog, Microsoft, and More

8. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 80

Datadog, Inc. (NASDAQ:DDOG) is one of the AI stocks on Wall Street’s radar. On July 6, Bernstein SoC Gen raised the price target for Datadog (NASDAQ:DDOG) stock to $226 from $180. However, the research firm downgraded the stock to Market Perform from Outperform.

The downgrade comes amid concerns that the company could face tough earnings comparisons starting in the third quarter. A major point of concern is the slowing demand signals across both enterprises and some AI Labs. Non-AI revenue is expected to slow down, which accounts for about 85% of revenue. Bernstein believes it is expected to peak in the third quarter, followed by a potential 100-basis-point decline in the fourth quarter.

Bernstein SoC Gen is also wary that Datadog could experience a 500-basis-point decline in growth rate in the fourth quarter to about 29%. It would be a significant decline, given the investor consensus growth estimate of 30% to 40%.

Datadog, Inc. (NASDAQ:DDOG) operates an observability and security platform for cloud applications in the United States and internationally.