DDOG

- Datadog shares rose 5% today after BofA raised its price target to $335 from $305 and kept its Buy rating. - The rise follows Thursday's 4% drop, which came after a report that Datadog had offered nearly $4 billion for cloud security startup Upwind. - Datadog had $5 billion of cash and marketable securities at the end of June, which is more than the reported price, so it can afford the deal. - Third-quarter results on Nov. 4 are the next test, against revenue guidance of $1.14 billion at the midpoint. Datadog (DDOG:NASDAQ) is up 5% today. Before the open, BofA analyst Koji Ikeda kept his Buy rating and raised his price target to $335 from $305 ahead of third-quarter earnings. That's a better mood than Thursday's, when shares fell 4% on news that Datadog wants to buy its way further into cloud security. The Information reported on Thursday that Datadog had offered nearly $4 billion for Upwind Security, an Israeli cloud security startup. Upwind hasn't accepted. It's also reportedly closing a $300 million funding round at a valuation of about $3.8 billion, so Datadog's offer is barely above what private investors are paying. Today's rise wasn't only about Datadog, either. Other security stocks rallied this morning too. Nearly $4 billion is a big check. But Datadog ended fiscal 2025 with $4.48 billion of cash and short-term investments, against $1.28 billion of debt… By June 30, 2026, that cash pile had grown to $5 billion. Free cash flow keeps adding to it: it passed $1 billion in fiscal 2025, up from $277 million in 2021. TIKR tracks 48 analysts on Datadog. How many say "Buy"? See the full breakdown of Buy, Hold, and Sell ratings on Datadog, along with Wall Street's revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Datadog's Analyst Ratings Datadog reports before the open on Wednesday, Nov. 4. It has guided to third-quarter revenue of $1.14 billion at the midpoint, which would be growth of about 29%. That's down from 36% in the second quarter, after management said its largest customer started using less of the platform in the third quarter. The stock isn't cheap going into the report. At Thursday's close it traded at 97x forward earnings, below its five-year average of 106x but about double its February low of 47x… At this morning's price, it's closer to 102x. My take: Thursday's selloff over Upwind looks overdone. Datadog can pay for the deal out of cash it already has, at barely more than Upwind's own private valuation. BofA's $335 target, though, needs earnings estimates to keep rising, so Datadog has to beat its guidance on Nov. 4 and raise it. Of course, there's no deal yet. Upwind hasn't said yes, and a higher bid would change the math. TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR's valuation model and see what Datadog could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It's free to use. Value Datadog for free

Datadog, Inc. (NASDAQ:DDOG) watches software while it runs. When an application slows or breaks, its tools are what the engineers look at first. The stock closed at $260.36 on October 19. It has returned 97.7% over the last 6 months, compared with an 11.6% return for the Insider Monkey Billionaire Index and 8.7% for the State Street SPDR S&P 500 ETF Trust. The business is growing quickly and earns almost nothing as reported. The share price has behaved as though only the first half of that is true. READ ALSO: 10 AI Stocks Beyond NVIDIA That Could Surge in 2026 Revenue rose 35.60% year on year, and it grows the way good software businesses do, by customers using more rather than buying more. Monitoring scales with how much a customer runs. The cash is real even where the profit is not. Operating cash flow ran at $1.23 billion against revenue of $3.97 billion, and borrowings are modest enough against equity that a weak year would force nothing. Datadog is one of the ten in our 10 Most Promising Cloud Stocks According to Hedge Funds. To see the rest of the list, click HERE. The shares have nearly doubled over six months. Nothing in the reported numbers moved that far, so the move came from what buyers expect rather than from what the company delivered. The reported margin is the problem with that. Operating profit is 0.67% of revenue, so almost the whole of what the business earns is consumed before it reaches an owner. The gap between that figure and the adjusted one the market quotes is mostly pay issued in shares. Consumption pricing cuts the other way too. Revenue that rises when customers run more also falls when they run less, and that is not within Datadog's control. DON'T MISS: 10 Best Stocks to Buy for High Returns in 2026 The price is 84.75 times what analysts expect next year. That needs the growth to hold and the margin to widen, not one or the other. Expectations have moved further than earnings over the past six months. The gap closes when earnings catch up or when the price comes back, and the second is quicker. Monitoring is one slice of a much larger subscription market. 10 Best SaaS Stocks to Buy According to Hedge Funds maps the rest of it. The business is doing well, and the share price has done better. Monitoring revenue tracks what a customer consumes, which is a fine way to be paid and explains the growth rate. What has not kept pace is the reported profit, since costs take almost all of it and a large charge for stock issued to staff sits among them. The price now assumes that changes. Watch the margin rather than the revenue, since revenue is the half that is already working. Datadog, Inc. (NASDAQ:DDOG) was held by 92 hedge funds with a combined stake value of about $3.94 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 80 hedge fund holders in the previous quarter. While we acknowledge the risk and potential of DDOG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DDOG and that has 10,000% upside potential, check out our report about this cheapest AI stock. READ NEXT: 10 Most Promising Cloud Stocks According to Hedge Funds and 10 Best Cybersecurity Stocks to Buy in 2026 This article is originally published at Insider Monkey.

US stocks are set for a firmer open, with sentiment leaning risk on as investors focus on a clear upswing in American factory activity. The key driver this morning is stronger than expected industrial and capacity data. Industrial production rose 0.7% month over month in September, while manufacturing capacity utilization reached 75.9%, the firmest reading since early 2024. These figures point to busier production lines and a domestic economy that still carries momentum into the fourth quarter. When factories run hotter, companies often gain better pricing power and revenue visibility, but bond markets can start to price in stickier inflation risk. Higher implied inflation tends to lift yields, which raises borrowing costs for households and capital intensive sectors that rely heavily on debt financing. The open question is whether this stronger output picture will matter more for earnings optimism or for interest rate anxiety. Upcoming US housing data and the next Atlanta Fed GDPNow update could shift that balance quickly if growth signals change. Amazon.com (AMZN) Amazon.com is in focus after two new AWS related moves. TorchNeuron, a tool for running PyTorch models on Amazon's Trainium chips, targets Nvidia's CUDA advantage by cutting the work needed to switch hardware. The group also secured a warrant worth about US$521.4 million in an expanded 3M data center partnership tied to up to US$6 billion of product purchases. Watch how both steps feed into AWS demand and AI workloads. Tradeweb Markets (TW) Tradeweb Markets agreed to buy Trumid Holdings for about US$2.0 billion. The deal adds an electronic corporate bond marketplace and connects primary issuance with secondary trading on one platform. Management aims to broaden credit trading coverage across developed and emerging markets, with closing targeted in the first half of 2027. Investors will focus on integration progress and whether adjusted earnings per share turn accretive in the first full year after completion. Southwest Airlines (LUV) Southwest Airlines reports Q3 2026 on October 22 with EPS estimated at US$0.57 on US$8.24b of revenue. Recent analyst sentiment has turned more cautious around pricing power and cost inflation. The update will test whether Southwest Airlines is building a more durable profit base or if earlier strength was temporary. Pay attention to commentary on fares, fuel, and capacity plans into year end. - Western Digital (WDC) surged 6.09% as chip stocks rebounded, supported by easing yields and renewed interest in AI hardware. - Datadog (DDOG) climbed 5.36% after a Bernstein upgrade to Outperform that highlighted strong growth in AI related token consumption. - Twilio (TWLO) advanced 5.29% following a BTIG price target increase tied to S&P 500 inclusion and enthusiasm around AI agents. - Cerebras Systems (CBRS) fell 5.15% after the company objected to tokenized versions of its stock on OKXICE. - NRG Energy (NRG) declined 4.21% after multiple brokers cut price targets, despite a newly declared quarterly dividend. - Ameriprise Financial (AMP) dropped 4.07% following a BofA downgrade citing advisor attrition and related margin pressure concerns. US housing data and a dense run of mega cap earnings now take center stage as traders weigh factory strength against how much consumer and credit demand is really holding up. - US Housing Starts and Building Permits Tue 20 Oct. Consensus looks for 1.31m housing starts and 1.40m permits for September, and any clear miss on those levels would flag pressure on construction activity and related materials suppliers, while borrowing costs remain elevated. - US Pending Home Sales Tue 20 Oct. Economists expect pending deals to dip 0.5% month on month and improve to 1.0% year on year, and a weaker print would point to softer realtor commissions and homebuilder order books, even with firmer factory data. - Netflix (NFLX) Q3 2026 results Tue 20 Oct. Subscriber trends and revenue in the streaming business will show how far price changes and content spending are resonating with households that are already managing higher living and financing costs. - Tesla (TSLA) Q3 2026 results Wed 21 Oct. Automotive margins and guidance around electric vehicle demand will shape how investors think about appetite for big ticket purchases at current loan rates and the potential impact on auto suppliers and charging infrastructure. - Meta Platforms (META) Q3 2026 results Wed 21 Oct. Advertising revenue and any comments on AI related spending will influence sentiment on digital ad budgets and broader expectations for corporate marketing outlays into year end. Tech: AI headlines, higher rates tug Tech has slipped over the past week, with a 7 day decline of about 4.7% even though the 1 year return remains above 20%. Big stories around quantum computing at Quantinuum, Apple's upcoming Mac event, and Microsoft's role in funding AI chips all keep excitement high, while higher rate expectations still weigh on valuation sensitive names. If you hold broad Tech ETFs or large US platforms, the catalyst to watch now is this afternoon's Atlanta Fed GDPNow update. A stronger growth estimate can push Treasury yields higher, which tends to pressure sectors where a lot of the appeal comes from earnings further out in time. Semiconductors: Strong year, sharp recent wobble Semiconductors have had a very strong year to date yet fell roughly 6.6% over the last 7 days, a steeper pullback than Tech overall. Headlines span Nvidia's data center deals, AXT's long term supply agreement, and CoreWeave's higher borrowing costs, so the theme is still heavy AI infrastructure spending that often depends on credit markets. If your portfolio leans on chip designers or equipment makers, focus on Tesla's earnings tomorrow and commentary from other AI hungry customers. Any change in tone on AI data center build plans or funding costs can quickly shift sentiment on whether current chip demand feels comfortable or stretched. Energy & Oil and Gas: Outperformers as fuel stays tight Energy and Oil and Gas keep outperforming, with Energy up about 2.0% and Oil and Gas ahead roughly 2.4% over the past week on top of already strong 1 year gains. Company news around nuclear projects at Centrus Energy and Chord Energy's asset sales sits against a backdrop of import price data that showed fuel costs contributing to higher US import prices. For anyone holding energy producers or sector funds, tonight's API crude stock estimate and tomorrow's official EIA inventory data matter most. Signs of another meaningful crude or gasoline draw would support the idea that supply remains tight, which feeds into cash generation for the group and also into what US households pay at the pump. Real Estate: Higher yields keep pressure on property Real Estate is softer, with a 7 day decline of about 0.6% and a slightly negative 30 day return, even though the 1 year figure is close to flat. Elevated US mortgage rates keep financing expensive for buyers and developers, while stories such as Newmark's work on affordable housing and industrial outdoor storage show capital still flowing into select niches. If you own REITs or property managers, the key near term test is today's trio of US Housing Starts, Building Permits, and Pending Home Sales. Weak construction or sales figures would suggest higher borrowing costs are still biting, which matters for occupancy, rent growth and the ability of property owners to refinance on acceptable terms. Consumer Staples & Food, Beverage & Tobacco: Everyday spending offers some cushion Consumer Staples and Food, Beverage & Tobacco have both moved higher over the last week, with 7 day gains of about 3.7% and 3.2% respectively and positive 1 year returns. Brands from Walmart to Mondelēz and Dole are active in everything from new product launches to bond financing, which keeps attention on goods households buy regularly, regardless of housing or auto demand. If you use these sectors as ballast alongside more volatile holdings, keep an eye on how September import and export price moves flow through upcoming earnings commentary. Any signs that input costs for food and packaged goods are stabilising or rising again will shape how much pricing power these companies can use without pushing consumers to trade down. With Energy and Oil and Gas up over the past week as fuel stays tight, you can pressure test that theme against this list of 36 elite gold producer stocks This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

(Updates with latest market prices and developments.) US benchmark equity indexes were mostly higher intraday, with big technology names among notable gainers at the start of a busy earnings week. The Nasdaq Composite was up 1.2% at 26,463.4 after midday Monday, while the S&P 500 rose 0.5% to 7,699.7. The Dow Jones Industrial Average edged down 0.1% to 51,978.1. Most sectors were in the red, led by utilities, while consumer discretionary paced the winners with a 2.7% advance followed by tech's 1.5% gain. Amazon.com (AMZN) was up 5% intraday, the best performer on the Dow, followed by IBM, Nvidia (NVDA), Alphabet (GOOG, GOOGL), and Microsoft (MSFT). Alphabet likely saw "relatively healthy" Google search revenue growth in the third quarter, driven by higher pricing amid solid search volume, Deutsche Bank said Monday. On the S&P 500, Datadog (DDOG) jumped 6.5%, the biggest gain on the index, followed by SanDisk (SNDK) and Marvell Technology (MRVL). Netflix (NFLX) is expected to report quarterly earnings on Tuesday, with Facebook and WhatsApp parent Meta Platforms (META) and electric vehicle manufacturer Tesla (TSLA) scheduled to release theirs on Wednesday after market close. GE Aerospace (GE), Philip Morris International (PM), Thermo Fisher Scientific (TMO), Procter & Gamble (PG) and American Express (AXP) also report this week. Oppenheimer Asset Management upgraded its S&P 500 full-year earnings outlook, saying the third-quarter reporting season got off to a solid start. The firm continues to expect the index to close 2026 out at 8,100. "Our expectations are that another better-than expected quarter is in the offing," Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus said in a report Monday. "Given the economic and corporate fundamentals experienced over the course of recent quarters along with watershed innovation that has seen reports of increased adoption of (artificial intelligence) by businesses and consumers, stocks may well have further upside ahead before year-end." Treasury yields were higher intraday, with the 10-year rate up five basis points at 5.15%, while the two-year rate rose 3.8 basis points to 4.77%. West Texas Intermediate crude oil edged up 0.5% to $101.89 a barrel intraday, while Brent dropped 0.5% to $109.34. US President Donald Trump on Friday signed an executive order to waive key sanctions and tariffs on Russia. Trump had recently lifted sanctions on Russian diesel exports. Meanwhile, Russian President Vladimir Putin has proposed a meeting between Trump and Chinese President Xi Jinping and himself next month to discuss a potential deal to end the Ukraine war, The Wall Street Journal reported, citing people familiar with the discussions. Spot gold fell 0.7% to $4,138.60 per troy ounce, while silver ticked up 0.1% to $57.34 per ounce.

- Datadog's revenue growth accelerated for five straight quarters, from 24.59% in Q1 2025 to 35.64% in Q2 2026, when sales reached $1.12 billion. - The Q3 guide of $1.135 billion to $1.145 billion implies only about 1% to 2% sequential growth because management assumed the largest customer's usage would remain at its contractual commitment level. - The NTM P/E has rebounded to 101.14x, well above its 76.82x average since January, even with the stock still about 5% below its pre-earnings close. On the morning of August 6, Datadog (DDOG) reported the kind of quarter growth investors wait years for. Revenue rose 36% to $1.12 billion, the $115 million sequential gain was a company record by a wide margin, and customers outside the AI cohort grew in the high 20s percent, up from 18% a year earlier. By the afternoon, the stock was down 16.6% at $235.95. The trigger sat a few lines lower. Third-quarter guidance of $1.135 billion to $1.145 billion implies 28% to 29% year-over-year growth and revenue only about 1% to 2% above Q2. After an 11% sequential jump, that looked like a wall. Management explained the gap on the Q2 earnings call. The largest customer, which CEO Olivier Pomel described as a leading AI company, signed a nine-figure renewal but reduced its usage starting in Q3. Rather than guess how far usage would drift, Datadog guided that account at its contractual floor. "It can't go below the commitment," CFO David Obstler said at a Goldman Sachs conference in September. The revenue chart shows what that single account is standing in front of. Growth bottomed at 24.59% in Q1 2025, then rose to 28.12%, 28.35%, 29.21%, 32.15% and 35.64% over the next five quarters. Quarterly revenue climbed from $0.76 billion to $1.12 billion across that stretch. Pomel argued the trend barely depends on the account in question, saying that backing out the largest customer leaves "pretty much the same growth rate." New customers are also pulling more weight, accounting for about 30% of year-over-year revenue growth in Q2, up from 25% in Q1. That does not make the guide meaningless. Usage-based revenue can fall as quickly as it rises, and Datadog learned that after the pandemic boom. Pomel told a Citi conference in September that cloud-native customers made up "about 40% of our business at peak" before spending contracted, and that exposure to AI natives today is "much smaller." The valuation chart shows how quickly investors came around. Datadog's NTM P/E peaked at 116.91x just before earnings, slid toward 80x by early September, and has since climbed back to 101.14x. NTM EV/Revenue sits at 18.75x, against a 21.76x high and a 13.98x average since January. The share price has not fully followed. Datadog closed at $268.70 on September 28, about 14% above where it traded on August 6 but still roughly 5% below the $283.17 close before earnings. A multiple back near its highs with the price still below its pre-earnings level likely reflects higher forward earnings estimates after management raised full-year revenue guidance to $4.45 billion to $4.47 billion. The results suggest the broader customer base remains strong despite the impact from the largest account. Five quarters of acceleration, a floor-based assumption for the largest account, and a guidance method that Obstler says deliberately discounts observed usage trends all leave room for Q3 to land above the range. At 101x forward earnings, though, the stock is no longer pricing a one-customer scare. It is pricing the acceleration holding. That raises the stakes for the Q3 report. Non-AI growth staying in the high 20s and revenue clearing the $1.145 billion top end would support the rebuilt multiple. A fade in the broader customer base would be the real warning, because the guide already carries the largest customer at its contractual floor. At 101.14x forward earnings, Datadog now needs its broader customer base to keep accelerating. Monitor DDOG valuation multiples and estimate revisions on TIKR for free →

Snowflake drops 4% ahead of earnings and Datadog falls 6% with no catalyst, pointing to profit-taking on crowded high-beta software positions rather than company-specific news. IGV slides 3% while QQQ gains 0.2%, confirming traders are rotating out of software specifically rather than selling technology as a whole. Datadog's 65% and Snowflake's 46% YTD gains gave traders thick cushions to trim, making positioning the clearest driver of today's selloff. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now. The report is free. Enter your email and see if any of your stocks made the cut. Software is the day's clearest sore spot at midday, with a handful of the year's biggest AI-era winners giving back ground even as the broader large-cap technology tape barely moves. That split is the actual story of the session, and it explains why several unrelated names are sinking together while the index stays quiet. The iShares Expanded Tech-Software Sector ETF (NASDAQ:IGV) is down 3% to $103.06, tracking software as a distinct slice of the market. Meanwhile, the Invesco QQQ Trust (NASDAQ:QQQ) is up 0.2% to $709.20, which leaves the NASDAQ 100 slightly higher on the session. That contrast tells the session's clearest story, since money is leaving software as a group rather than technology as a whole. Snowflake (NYSE:SNOW) stock is down 4% to $306.22 ahead of its fiscal Q2 2027 report scheduled for after today's close. Meanwhile, Datadog (NASDAQ:DDOG) shares are falling harder, down 6% to $211.29, with no earnings scheduled and no fresh company headline attached to the move. Cloudflare (NYSE:NET) stock is also down 4% to $273.09, rounding out a trio where the deepest cuts are landing on the highest-flying names in the space. Free Report, Just Released Did Any of Your Stocks Make the Top 10 List? It is an uncomfortable question, and there is now an answer to it. 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now. Open your account and look at what you own. Some of it you bought for a reason you could still defend today. Some of it you bought years ago for a reason you can no longer remember. The report is free. Put the ten next to what you own and find out which is which. Enter Your Email and See the Ten → Free from 24/7 Wall St. It lands in your inbox. Snowflake is confirmed to report fiscal Q2 2027 results after today's close, and that scheduled event is real and looming. Yet the pattern across the three tickers does not fit a straightforward earnings-nerves read, because Datadog and Cloudflare are not on the calendar today and are still moving lower in step with Snowflake. If nerves alone were the story, the two non-reporters would be somewhere near the flat line rather than leading the group down. No fresh company-specific headline explains today's declines in Datadog or Cloudflare, and the broader software fund is weakening at the same time. The cleaner explanation is a rotation out of high-multiple software rather than a narrative tied to any one ticker, and that framing lines up with what the ETF split is showing on the tape. Snowflake's late-day report is a coincidence of timing more than a driver of what has already happened this morning. The software group had rebuilt momentum coming into September after a strong August recovery, and today's action looks more like traders locking in profits than a change in the AI narrative that has powered the group all year. When the biggest decliners are also the biggest recent winners in a sector, positioning tends to explain more of the day than fundamentals do. That is the read most consistent with today's ticker-by-ticker picture across Snowflake, Datadog, and Cloudflare. Each of the three featured names is dropping further than the software fund itself, which is the fingerprint of the most expensive names in a sector being sold first. Snowflake stock was up 46% year to date (YTD) through Tuesday's close. Datadog stock was up 65% and Cloudflare stock was up 45% over the same window, giving each of them a thick cushion of prior gains for traders to trim into strength. Datadog's leading decline is the most instructive detail in the group today. With no report scheduled and no announcement circulating, the deepest cut is landing on a name with nothing on its own calendar to blame for the move. Traders trimming their exposure to the year's crowded winners looks like the simpler explanation, and profit taking of this shape typically hits the highest-beta software names before it spreads to steadier corners. Additionally, the QQQ's slightly-higher print today underscores that this is not a technology-wide flush. Large-cap tech is holding up while the software sleeve inside it is being sold down, which is what a targeted rotation looks like. That is rotation, not a sector-wide verdict on the AI trade that has driven names like Snowflake, Datadog, and Cloudflare to their current levels. Snowflake's fiscal Q2 2027 release and its conference call after today's close is the next scheduled event that can reset sentiment across the group. A clean report may steady IGV and pull the peer trade higher with it, and a softer one can extend today's move into the next session for Datadog and Cloudflare as well. Either outcome will be measured against a group already in a fragile spot. Traders can watch for whether IGV holds its recent range into the close, since the sector fund's behavior is doing more to explain today's action than any single company inside it. A finish below where the fund started the week would strengthen the rotation read and put more pressure on the peer group heading into the Snowflake report tonight. Investors weighing their exposure to the highest-multiple software names in IGV may want to lean toward moderate position sizes into tonight's report and keep dry powder for the reaction. The group's leaders have already moved sharply against their holders today, and the market shifted quickly enough to justify tighter risk controls on those positions. Snowflake's report will resolve part of the uncertainty for the software complex, though probably not all of it. If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research point to as the 10 best stocks to buy right now, and it's free. Read more here and >;elm:context_link;itc:0;sec:content-canvas" data-yga="{"yLinkElement":"context_link","yModuleName":"content-canvas","yLinkText":"see which stocks made the cut -->"}" class="link ">see which stocks made the cut -->> Contact [email protected] for any questions or corrections.

Interested in Snowflake Inc.? Here are five stocks we like better. MarketBeat's five most-upgraded stocks over the past 90 days are all software companies, including Snowflake, Okta, Datadog, CrowdStrike, and Palo Alto Networks. Analysts cite these companies' ability to directly monetize the AI boom, through consumption-based data platforms, AI agent identity security, and cloud observability, as the driver of upgrades. All five stocks have posted strong year-to-date gains and carry consensus Moderate Buy ratings, but several trade near price targets ahead of upcoming earnings that could test valuations. When analysts collectively raise their price targets and ratings on a single group of stocks, it pays to notice. Upgrades reflect where Wall Street's research desks see the earnings power and momentum heading next, and when they cluster tightly around one theme, that clustering could potentially mark the early stage of a leadership rotation. Right now, something worth flagging is happening on MarketBeat's most-upgraded stocks list: the five names drawing the heaviest analyst enthusiasm over the past 90 days are all software companies. Now, this is not entirely a coincidence. After a brutal stretch earlier in the year that saw software badly lag the AI hardware trade, the group has come roaring back. The iShares Expanded Tech-Software Sector ETF (BATS: IGV) has climbed about 9.65% over the past quarter, comfortably outpacing the broader S&P 500. This comes as capital has rotated out of the crowded, expensive semiconductor, memory, and neo-cloud names and into software companies that are now proving they can monetize AI in their own right. → Rocket Lab's Sell-Off Is Fading—Is It Finally Safe to Buy? The five names below sit at the center of that shift, and here is why analysts can't stop upgrading them. Snowflake (NYSE: SNOW) runs a cloud-based data platform that lets enterprises store, analyze, and share massive volumes of data across every major public cloud. It has become one of the purest ways to play a simple reality: artificial intelligence is only as good as the data feeding it, and analysts have taken note. → Travel + Leisure Goes Big—Is It Ready to Rally? The stock is up about 51% year-to-date, and the upgrades keep coming. Just last week, Truist raised its price target to $375, well above the current price, and the consensus rating among 40 analysts is Moderate Buy. And the overarching sentiment and theme driving the narrative is fairly straightforward. Snowflake's consumption-based model means that as customers build and run more AI workloads, they consume more Snowflake, turning the AI boom into a direct revenue tailwind. With earnings just around the corner, due Sept. 2, analysts have been confidently lifting targets and ratings ahead of what many expect to be another strong quarter. Okta (NASDAQ: OKTA) is the leading independent provider of identity and access management, the software that controls who can log in to what across an organization's digital footprint. Long viewed as a mature, steady grower, the company has found a fresh catalyst in the AI era, where securing not just human identities but autonomous AI agents has become a rapidly expanding need. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects That narrative and organic, strategic shift, if you will, has powered the stock by almost 57% this year, and the analyst community has moved quickly, rating it as a consensus Moderate Buy. In just the past week alone, JPMorgan raised its price target to $165, and Cantor Fitzgerald reaffirmed its Buy rating. Morgan Stanley and KeyCorp reiterated their Overweight ratings on the stock, with both price targets implying over 27% upside. The company's improving profitability, paired with its emerging role in securing AI agents, has reframed what was once seen as a forgotten software name. The company is set to report its Q2 results on Aug. 26, so investors can expect another round of analyst actions. Heading into the print, the stock has spent several months consolidating in the upper band of its 52-week range, with $130 acting as critical support and $156 as the major breakout level. Datadog (NASDAQ: DDOG) provides cloud monitoring and observability, giving engineering teams real-time visibility into the health and performance of their applications and infrastructure. As enterprises pour money into AI and cloud workloads, the need to monitor those increasingly complex systems grows right alongside it, placing Datadog squarely in the flow. The stock has been a standout sector and industry performer, up about 73% year to date, and it carries the most attractive upside target in this group. The consensus rating across 45 analysts is Moderate Buy, with an average price target of $276.32, implying more than 17% upside from current levels. Datadog's Q2 2026 report on Aug. 6 actually beat expectations, and while the stock sold off on that print amid a stretched valuation, analysts have used the subsequent pullback to reiterate their conviction. The company reported earnings per share (EPS) of 65 cents, comfortably topping the estimate of 58 cents, while quarterly revenue grew 35.6% over the prior year, also beating estimates. CrowdStrike (NASDAQ: CRWD) is the dominant force in cloud-native cybersecurity, protecting endpoints, cloud workloads, and identities through its Falcon platform. It has become the enterprise standard in an era when AI is enabling attacks at machine speed, and that structural tailwind has kept analysts firmly in its corner. Shares are up almost 64% year to date, and the company has continued to draw positive analyst action, including recent target raises tied to its new partnership with Cerebras (NASDAQ: CBRS) to accelerate its AI security capabilities. The consensus across 50 analysts, the deepest coverage of this group, is Moderate Buy. One honest flag to note is that, after its powerful run, the stock has recently pulled back and now trades near the consensus price target, so much of the near-term optimism might already be priced in. But that structure could change soon, with earnings expected on Aug. 26 after the market closes. Expectations are running hot for CRWD, with the consensus estimate calling for an almost 26% year-over-year increase in earnings and about 23% growth in sales over the prior quarter. Palo Alto Networks (NASDAQ: PANW) is the largest pure-play cybersecurity company in the world, consolidating firewalls, cloud security, and AI-driven security operations into a single platform. Its platformization strategy, getting customers to adopt its entire security stack rather than piecemeal tools, has made it the default enterprise choice as companies race to secure their AI deployments. No name on this list has performed better in 2026, with the stock up an eye-catching 94% year to date as of Friday’s close. Palo Alto also has the strongest news sentiment score in the group, and it just launched a Frontier AI defense program to protect enterprise AI systems. The consensus across 48 analysts is Moderate Buy. As with several of its peers, the valuation is now rich and the stock trades close to its average target, so the burden shifts to its upcoming earnings report, expected around Sept. 1, to justify the enthusiasm. Institutional activity in Palo Alto has been rampant, with a whopping net inflow over the prior 12 months. Over the prior year, more than $51 billion in total institutional inflows have been recorded, versus just $4.4 billion in outflows. Ahead of the company's all-important Q2 report, its current institutional ownership percentage is nearly 80%. Five stocks, one sector, and a wave of analyst upgrades that is hard to ignore. What connects these names is a shared realization on Wall Street: software is no longer the laggard of the AI trade but an increasingly direct beneficiary of it, whether through consumption-based data platforms, identity security for AI agents, or observability for sprawling cloud systems. The upgrades reflect that shift in thinking. But the caution, as is often the case in this market, is valuation. Several of these names have run hard and now trade near their targets, with earnings reports looming that will separate the leaders from the laggards. However, one thing remains clear: when analysts move this decisively on an entire group, it is usually a signal worth respecting. The article "5 of the Most-Upgraded Stocks Over the Last Quarter Are All Software Names—Here's Why" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Datadog’s Q2 results were met with a significant negative market reaction, despite the company delivering revenue and non-GAAP profit above Wall Street’s expectations. Leadership pointed to continued acceleration in both AI-native and traditional customer segments, as well as broad product adoption, as the main drivers of quarterly performance. CEO Olivier Pomel noted, “We continue to see healthy trends in customer demand,” emphasizing that the platform’s usage is expanding across a wide range of customers. However, management acknowledged that a usage reduction by Datadog’s largest customer impacted the quarter and has been factored into their risk assessment and outlook. Is now the time to buy DDOG? Find out in our full research report (it’s free). Revenue: $1.12 billion vs analyst estimates of $1.08 billion (35.6% year-on-year growth, 3.9% beat) Adjusted EPS: $0.65 vs analyst estimates of $0.58 (11.4% beat) Adjusted Operating Income: $257 million vs analyst estimates of $233.3 million (22.9% margin, 10.2% beat) The company lifted its revenue guidance for the full year to $4.46 billion at the midpoint from $4.32 billion, a 3.2% increase Management raised its full-year Adjusted EPS guidance to $2.52 at the midpoint, a 5% increase Operating Margin: 0.5%, up from -4.3% in the same quarter last year Customers: 4,720 customers paying more than $100,000 annually Annual Recurring Revenue: $4.71 billion (35.6% year-on-year growth, beat) Billings: $1.18 billion at quarter end, up 38.1% year on year Market Capitalization: $86.5 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Sanjit Singh (Morgan Stanley): Asked about the largest customer’s contract renewal and its impact on guidance. CEO Olivier Pomel said usage decreased, so guidance was fully derisked, while CFO David Obstler explained this approach was consistent with prior methodology. Raimo Lenschow (Barclays): Inquired about observability needs for AI inference workloads. Pomel explained there are opportunities at every layer of the stack, noting customer focus has shifted from correctness to cost optimization as AI matures. Gabriela Borges (Goldman Sachs): Questioned how Datadog addresses CFO concerns about rising observability costs. Pomel highlighted Infinite Cardinality Metrics and evolving product packaging as responses to customer feedback. Michael Cikos (Needham): Asked about the ramp in new logo contributions. Obstler clarified that growth from new customers is compounding over time, driven by AI capabilities and broader platform pull-through. Ittai Kidron (Oppenheimer & Co.): Sought clarity on customer additions and Bits AI’s role in security automation. Obstler pointed to stable gross additions, while Pomel said Datadog is moving toward broader AI-driven security operations center (SOC) capabilities. In the coming quarters, our analyst team will focus on (1) sustained adoption and monetization of new AI observability and security products, (2) customer response to evolving product packaging and cost-management features, and (3) the impact of large enterprise and government wins on overall revenue growth. The pace of Bits AI adoption and progress in federal sector sales will also be important signposts for Datadog’s execution. Datadog currently trades at $240.45, down from $283.17 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.