In this article, we will list the 5 Best Cloud Stocks to Buy as Azure Growth Hits 40%. Please visit 9 Best Cloud Stocks to Buy as Azure Growth Hits 40% if you’d like to see an extended list and the methodology behind it.
5. Dynatrace, Inc. (NYSE:DT)
Number of Hedge Fund Holders: 53
Dynatrace, Inc. (NYSE:DT), featuring a short float of 3.81% and upside potential of 21.20%, earns a spot on our list of the best cloud stocks to buy as Azure growth hits 40%.
Dynatrace, Inc. (NYSE:DT)’s May 15, 2026, fourth-quarter results surpassed analysts’ revenue and earnings estimates. However, investors do not appear to be focused on that.
On May 13, 2026, Wedbush cut its price target to $48 from $55 while keeping an “Outperform” rating, noting the beats would likely be overshadowed by a lighter-than-expected near-term guide and margin pressure.
Annual recurring revenue also came in above the company’s own guidance but fell short of Street whisper numbers. That comparison became harder following Datadog’s strong results the prior week. Nevertheless, Wedbush maintained that Dynatrace, Inc. (NYSE:DT) remains well-positioned in the software landscape, with AI and cloud complexity creating demand for observability as organizations manage increasingly agentic workloads.
That long-term view received a high-profile endorsement in late April 2026.
Reuters reported that Starboard Value disclosed a “substantial” stake in Dynatrace, Inc. (NYSE:DT). The hedge fund called Dynatrace undervalued, projecting at least 500 basis points of margin expansion by fiscal 2029, a $75 million annual reduction in sales and marketing costs, and aggressive deployment of its $1 billion buyback authorization, with the potential to repurchase $2.5 billion in shares over three years.
Starboard argued the market has wrongly grouped Dynatrace, Inc. (NYSE:DT) with AI-disruption casualties, contending that rising cloud and agentic complexity should actually accelerate its growth. The stock is down roughly 10% this year and trades at nearly half the valuation multiple of infrastructure software peers.
Management guided fiscal 2027 ARR of $2.38 billion to $2.40 billion, implying growth of 15.5% to 16.5%, with net new ARR of $320 million to $340 million, accelerating from fiscal 2026 levels. Total revenue is expected to be between $2.32 billion and $2.34 billion, with subscription revenue of $2.22 billion to $2.24 billion, both growing 14% to 15%.
Dynatrace, Inc. (NYSE:DT) is a technology company that advances observability for digital businesses and primarily operates an AI-powered observability platform called Dynatrace.
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