Morgan Stanley Optimistic on Software Stocks Growth Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy DDOG?
Source: seekingalpha
- Healthy Demand Environment: Despite a 15% decline in infrastructure software stocks over the past month, Morgan Stanley analysts noted a healthy demand environment heading into Q1, with strong public cloud spending and software development growth expected for 2026, indicating a gradual recovery in market confidence for software stocks.
- Optimistic Outlook for Datadog: Morgan Stanley has an Overweight rating and a $180 price target on Datadog, with analysts highlighting strong underlying momentum heading into Q1, predicting revenue growth could accelerate to over 30%, suggesting a favorable stock reaction if results meet expectations.
- Strong Performance from JFrog and Palantir: JFrog also received an Overweight rating with a $70 price target, as analysts noted strong momentum and expected reacceleration in Q1; Palantir enters Q1 with an Equal-weight rating and a $205 target, supported by strong fundamentals and increasing customer adoption, making its revenue goals increasingly credible.
- Challenges for Atlassian and Dynatrace: While Atlassian is expected to exceed revenue growth expectations in Q3, analysts remain cautious about its future performance, and Dynatrace needs to provide stronger evidence of sustained annual recurring revenue acceleration, facing a higher bar for re-rating.
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Analyst Views on DDOG
Wall Street analysts forecast DDOG stock price to rise
33 Analyst Rating
30 Buy
3 Hold
0 Sell
Strong Buy
Current: 129.740
Low
140.00
Averages
207.39
High
255.00
Current: 129.740
Low
140.00
Averages
207.39
High
255.00
About DDOG
Datadog, Inc. provides an observability and security platform for cloud applications. The Company’s SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, user experience monitoring, cloud security and many other capabilities to provide unified, real-time observability and security for its customers’ entire technology stack. Its platform consists of products that can be used individually or as a unified solution and includes a marketplace where customers can access products built by its partners on top of the Datadog platform. Its products include Infrastructure Monitoring, Application Performance Monitoring, Log Management, Digital Experience Monitoring, Continuous Profiler, Database Monitoring, Data Observability, Universal Service Monitoring, Network Monitoring and others. It owns Metaplane, an end-to-end data observability platform that provides advanced machine learning-powered monitoring and column-level lineage.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Model Request Failure Rate: Approximately 5% of AI model requests fail in production, with nearly 60% of these failures attributed to capacity limits, leading to slowdowns and errors in AI applications, which adversely affect user experience and business operations.
- Multi-Model Adoption: OpenAI holds a 63% market share as the most widely used AI provider, while adoption rates for Google Gemini and Anthropic Claude have increased by 20 and 23 percentage points respectively, reflecting market recognition of multi-model strategies.
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- CLEAR Secure Performance: CLEAR Secure's stock surged 5.9%, with a year-to-date increase of 63.4%, now priced at $56.19 per share, marking a new 52-week high, reflecting strong market confidence in its future growth potential.
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- Strong Financial Performance: In Q1 2023, Sandisk's sales jumped 61% to $3 billion, with non-GAAP earnings soaring 404% to $6.20 per share; while future supply-demand imbalances pose risks, the current growth momentum renders its valuation reasonable.
See More
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- Market Share Growth: Although Sandisk ranks fourth in the NAND flash market, it gained 2 percentage points of market share over the past year, indicating its increasing competitiveness amid surging AI data center demand.
- Strong Financial Performance: In the January quarter of 2023, Sandisk's sales jumped 61% to $3 billion, while non-GAAP adjusted earnings soared 404% to $6.20 per share, reflecting the company's profitability in a rapidly growing market.
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