Datadog (DDOG) Tumbles 11.4% on Analyst’s “Sell” Reco

Datadog, Inc. (NASDAQ:DDOG) is one of the stocks drowned heavily. Are you holding any?

Datadog fell by 11.4 percent week-on-week as investors unloaded portfolios following a brokerage firm’s “sell” recommendation on its stock.

In a market note last week, Guggenheim Securities downgraded Datadog, Inc. (NASDAQ:DDOG) to “sell” from “neutral” over fears that its revenues could erode if its largest customer, OpenAI, moves workloads in-house.

The brokerage firm underscored OpenAI’s ongoing development of its own log management and metric tool, a shift that could dent Datadog, Inc.’s (NASDAQ:DDOG) billings in the second half of the year.

Analysts estimate OpenAI to account for around 60 percent of Datadog’s AI-native customers, and slash as much as $150 million in revenue hole by 2026.

Datadog (DDOG) Tumbles 11.4% on Analyst's "Sell" Reco

A close-up of a laptop with a software engineer coding on the monitor.

For the fourth quarter of the year, Guggenheim Securities expects Datadog, Inc. (NASDAQ:DDOG) to record a 17-percent growth in revenues, much slower than the 24.6-percent gain in the current quarter.

Additionally, the brokerage firm expects revenues to grow at a slower pace of 15 percent.

While we acknowledge the risk and potential of DDOG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DDOG and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.