It should have been good news for cloud computing stock Datadog (NASDAQ:DDOG), as it landed a new accolade from the analyst community. However, that wasn’t enough to keep Datadog stock from turning downward, sinking fractionally in Tuesday afternoon’s trading.
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Scotiabank started up coverage on Datadog, and its analysts had a lot to say about it, which was mostly good. Not only did it lead off with an Outperform rating, but it also got a price target of $138 per share. Scotiabank analysts declared that Datadog was a clear leader in its field, and its estimates for 2024 were within the realm of possibility. That means little overhang risk, which is something of a rarity in the field.
Further, there are signs that cloud-based systems might get an overall boost as businesses start getting back into the services field. All that and Datadog’s previous track record of solid gains make it a worthwhile proposition to Scotiabank.
Datadog Could Offer Useful Ancillary Services to the AI Market
Another point that is not in Scotiabank’s analysis but was seen less than a month ago is the idea that Datadog could make some headway thanks to the growth of generative AI systems. Since Datadog specializes in cloud monitoring tools and security systems, it could offer some useful ancillary services to the AI market. Considering how the AI market is set to blast up over the next few years, Datadog might be able to position itself for a piece of that ever-growing action.
Is Datadog a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DDOG stock based on 16 Buys and 12 Holds assigned in the past three months, as indicated by the graphic below. After a 71.13% rally in its share price over the past year, the average DDOG price target of $117.05 per share implies 0.21% downside risk.
