Datadog, Inc. (DDOG) A Top AI Stock on Wall Street’s Radar Downgraded at Bernstein SocGen

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.

Datadog, Inc. (DDOG) A Top AI Stock on Wall Street's Radar Downgraded at Bernstein SocGen: Here's Why

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.

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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