Wall Street doesn't always get things right, and it's probably not wise to base an investment decision on the word of a single analyst. But when a large group of analysts reaches a clearly bullish consensus on a particular stock, it can be worth listening. Sometimes it's a sign that there may be positive catalysts on the horizon that will help fuel upward momentum.
according to The Wall Street JournalMost of the analysts surveyed by the newspaper said both things. Mixed (NASDAQ: CFLT) And Datadog (NASDAQ:DDOG) The highest possible buy rating. In fact, not a single analyst recommends selling any of these artificial intelligence-related stocks. Here's why.
1. Confluent: The leader in data streaming
You may have never heard of data streaming, but I guarantee you engage with this technology on a regular basis. When we shop online, data streaming powers the live inventory information we use to make our purchasing decisions. Likewise, it powers the data feeds on our stock trading and sports betting platforms to ensure we get real-time, up-to-date prices.
The creators of the open-source data-streaming platform Apache Kafka founded Confluent to extend its capabilities and help enterprises deliver more live experiences to their customers. WalmartFor example, Walmart uses Confluent to connect its online and physical stores for real-time inventory management, so the company knows immediately when a product is sold out at any location. This means Walmart can replenish stock before it runs out, so customers always have what they need when they visit Walmart in person or online.
Confluent believes the data streaming addressable market is worth $60 billion. However, that number could grow artificial intelligence (AI) because developers are turning to platforms like Confluent to build massive data pipelines. Simply put, the success of an AI model depends on its ability to absorb data quickly so that it can make accurate responses or predictions. So, it's no surprise that 90% of IT experts think data streaming will drive innovation AI IndustryAccording to a recent survey conducted by Confluent.
Confluent generated $865 million in revenue over the past four quarters, so it has barely scratched the surface of its opportunities. It had 5,440 customers at the end of the recent second quarter (ended June 30), a 13% increase from the same period last year, but its highest-spending groups grew even faster. The company had 1,306 customers spending at least $100,000 a year on its platform, up 14%, and 177 customers spending at least $1 million, up 20%.
These figures highlight the growing importance of data streaming among large organizations.
The Wall Street Journal Confluent tracks 32 analysts covering the stock, and 21 have given it the highest possible buy rating. Four more are in the overweight (bullish) camp, and six recommend holding. Although one analyst has given the stock an underweight (bearish) weighting, no analysts recommend selling.
Their average 12-month price target is $30.79, which represents a 49% upside to Confluent's trading at the time of this writing, but Growth of the company and its addressed marketSo it could possibly increase even more in the long run.
2. Datadog: A unique artificial intelligence game
Datadog develops monitoring platform Cloud Infrastructure 24 hours a day. Since most businesses now have an online presence, they can reach a global customer base, which means their digital channels must be up and running uninterrupted 24 hours a day.
Datadog's platform can instantly alert an e-commerce operator if their website suffers from a technical bug in a specific country so they can fix it before it impacts the customer experience. In the past, they wouldn't know there was a problem until their sales dropped, by which time it was too late.
Over 28,700 businesses including retailers, gaming companies, banks, education providers, etc. rely on Datadog to monitor their infrastructure.
However, the company recently entered the AI ​​industry with a new tool designed for monitoring Large language models (LLM). LLM is the foundation of every AI Chatbot or software applications, and Datadog's new platform can help developers track costs, measure the performance of their models, and diagnose technical problems. Ultimately, this could give developers the confidence to bring their AI software to market faster.
Datadog generated revenue of $645 million in the second quarter of 2024 (ended June 30). CEO Olivier Pomel said 4% was exclusively due to AI, which Doubled This was 2% in the same period last year. Also, he said that about 2,500 customers are already using Datadog's AI tools, which is about 8.7% of its customer base.
According to a recent survey by PwC, nearly 70% of executives at leading corporations say AI will significantly change the way their organization creates value in the next three years. Therefore, Datadog will likely see a significant increase in the adoption of its AI tools among its existing customer base, but they will also be a huge draw for new customers.
The Wall Street Journal Datadog tracks 42 analysts covering the stock, and 28 have given it the highest possible buy rating. A further seven are in the overweight (bullish) camp, while another seven recommend holding. None of the analysts recommend selling.
Their average 12-month price target is $144.73, which represents a 28% upside to Datadog's trading at the time of this writing, but given that millions of businesses will adopt AI over time, investors should take a very long-term view with this stock. Furthermore, Datadog stock hit an all-time high of $192 in 2021, so can be a realistic goal over the next few years.
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Anthony DiPizio We have no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Confluent, Datadog, and Walmart. The Motley Fool has a position in and recommends Confluent, Datadog, and Walmart. Disclosure Policy,
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
