Monness is Bullish on Datadog, Inc. (DDOG), Here’s Why

Datadog, Inc. (NASDAQ:DDOG) is one of the best strong buy stocks to invest in right now. Monness Crespi & Hardt reiterated a Buy rating on Datadog, Inc. (NASDAQ:DDOG) on December 29 and set a price target of $255. The firm told investors that the optimistic rating is based on several factors that are not reflected in the company’s recent share price weakness, contending that the sharp pullback after a record high is excessive when compared to the company’s long-term prospects and underlying performance.

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

Despite a challenging macroeconomic backdrop, the firm believes that Datadog, Inc. (NASDAQ:DDOG) is structurally well-positioned to benefit from the increasing complexity of IT environments in the era of generative AI, as well as the ongoing cloud adoption.

The firm further cited Datadog, Inc.’s (NASDAQ:DDOG) strong 2025 execution as a significant factor supporting the optimistic outlook, attributable to healthy usage trends in its consumption-based model and the solid demand for its cloud-native observability and security platform. The company is continuously embedding Gen AI, like Bits AI, within its platform and is rapidly bolstering AI observability capacities, which, according to the firm, points towards meaningful incremental demand in the future. The firm thus sees the current valuation for the stock as an attractive entry point for long-term investors.

Datadog, Inc. (NASDAQ:DDOG) is involved in the development of a monitoring and analytics platform for business users, information technology operations teams, and developers. The platform automates and integrates application performance monitoring, infrastructure monitoring, and log management to offer real-time observability of the entire technology stack of its customers.

While we acknowledge the potential of DDOG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DDOG and that has 100x 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.