5 Best Software Stocks to Buy According to Billionaire Paul Tudor Jones

3. Datadog, Inc. (NASDAQ: DDOG)

Value: $7,705,000
Percent of Paul Tudor Jones’ 13F Portfolio: 0.218%
No. of Hedge Fund Holders: 52

Datadog, Inc. (NASDAQ: DDOG) is a monitoring service for cloud-scale applications specializing in monitoring databases, servers, services, and tools through a SaaS-based data analytics platform. Datadog has been one of the best software stocks to buy with a strong balance sheet and solid financial performance. 

Datadog recently announced revenues of $177.53 million for Q4 FY 2020, representing a 56.2% increase from what was reported during the same period in 2019. The company’s GAAP operating loss amounted to $8.9 million and a GAAP operating margin of 5%. During the quarter, non-GAAP operating income was $18.1 million while non-GAAP operating margin was 10%.

The technology has also reported a significant increase in the number of customers, with the number of $1M+ ARR customers increasing to 97 from 50. 

DDOG ranks 3rd in the list of best software stocks to buy according to billionaire Paul Tudor Jones.

Datadog has announced plans to acquire SaaS security platform Sqreen and observability data pipeline Timber Technologies for an undisclosed amount. Under the acquisition deal, Timber CEO Zach Sherman and co-founder and CTO Ben Johnson will be absorbed into Datadog under the product and engineering departments.

The acquisition of Sqreen is expected to bolster Datadog’s existing APM functionality as the company moves closer to providing full-stack security monitoring solutions.

Datadog, Inc. stock has received favorable analysis and rating from analysts. Truist recently gave a Buy rating and a price target of $120. On the other hand, Jefferies analyst Brent Thill strongly believes the stock will continue to outperform in 2021. Thil upgraded his rating from Hold to Buy and a price target of $275.