Enterprise software leader Datadog is a player in artificial intelligence with expertise in cloud computing. Datadog stock has formed a flat base with a buy point of 138.61, so the AI company is today's selection for IBD 50 Stocks To Watch.
Monitoring and observing complex business operations through a unified cloud platform allows enterprises to perform a range of tasks, from log management to ensuring secure networks. That's where Datadog comes in.
Datadog sales and earnings have grown steadily over the past eight quarters. In the fourth quarter, sales grew 26% to $589.7 million while 44 cents in earnings per share was 110% higher than the prior year for Datadog stock.
For the current quarter, analysts expect $590.4 million in sales, along with earnings of 34 cents per share. Both would represent 23% growth from the year-ago period.
In 2023, the stock had an impressive run as shares gained 65% vs. the S&P 500's gains of 24%. Shares then fell after fourth-quarter results on Feb. 13 but found support at the 50-day moving average, according to IBD MarketSurge chart analysis tools.
AI Stock Enters Google Partnership
Datadog provides tools to monitor cloud computing applications for businesses. Further, that market is $51 billion and is expected to grow to $80 billion by 2027, according to a Gartner research survey.
In November, the company partnered with Google parent Alphabet's Google Cloud and became a partner for VertexAI. The effort allows AI developers and operations teams to monitor the performance of AI and machine learning tools.
Mutual funds own 55% of outstanding shares. Further, more funds have been buying Datadog stock over the past four quarters. The Virtus KAR Mid-Cap Growth Fund(PHSKX) and the Artisan Mid Cap Fund(ARTMX) hold shares of the AI stock.
Datadog stock holds a Composite Rating of 98 while its EPS Rating is a best-possible 99. Also, the stock's Relative Strength Rating is a strong 90.
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