DDOG - The Single Best Artificial Intelligence (AI) Software Stock to Buy According to a Wall Street Analyst -- No It's Not Nvidia
2024-03-29 04:55:00 ET
Nvidia shares have rocketed 255% over the past year, propelled higher by the enthusiasm surrounding artificial intelligence (AI). However, the company currently earns most of its revenue from AI hardware, a market that Ark Invest believes will be 21 times smaller than AI software. That estimate seems plausible, given that businesses buy chips and other data center hardware infrequently, but those products can power numerous applications for several years before they must be replaced.
Building on that, Sanjit Singh at Morgan Stanley sees Datadog (NASDAQ: DDOG) as one of the software companies best-positioned to benefit from generative AI. Alex Zukin at Wolfe Research expressed even more conviction in a note to clients last year. He said generative AI tailwinds could make Datadog the "fastest growing software company." If that prediction comes true, Datadog would arguably be the single best AI software stock to buy.
Of course, investors shouldn't put all their chips on any single company. The best strategy is to buy a basket of AI stocks, and Datadog deserves a place in such a basket.
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The Single Best Artificial Intelligence (AI) Software Stock to Buy, According to a Wall Street Analyst -- No, It's Not Nvidia