Analyst Says This AI Stock Will 'Break Out to New Highs'

We recently published 10 Stock News You Should Not Miss as Tom Lee Reiterates Bullish Market Outlook Amid AI Catalysts. Datadog, Inc. (NASDAQ:DDOG) is one of the stock news you should not miss.

Joseph Terranova, Senior Managing Director, Virtus Investment Partners, said in a recent program on CNBC that he likes Datadog and believes the stock has more room to run. Here is what he said:

“Two years ago, Josh Brown and I were having a dinner on Long Island with a huge fan of the show and a New York sports legend. We discussed this stock, Datadog Inc (NASDAQ:DDOG). Certainly hope he purchased it because it’s going to break out further to new highs.”

Datadog Inc (NASDAQ:DDOG) makes observability services for cloud-scale applications, providing monitoring of servers, databases and tools. One of the company’s AI offerings is Bits AI, a suite of apps used for critical monitoring.

ClearBridge Large Cap Growth Strategy stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its third quarter 2025 investor letter:

“During the quarter, the Strategy initiated new positions in infrastructure software providers Oracle and Datadog, Inc. (NASDAQ:DDOG) and added to custom silicon developer Broadcom. Datadog operates a monitoring, observability and data security platform for cloud applications. Observability is a large and growing end market with penetration rising as use and complexity of applications grow, requiring more performance monitoring. Datadog is a leader in cloud application monitoring, offering ease of use, breadth and scalability superior to its competitors. We believe large language model (LLM) observability, a rapidly growing market due to the acceleration of Gen AI workloads, creates a new vector for growth not reflected in fundamental estimates. Datadog’s mission critical offering and rapid innovation should support attractive >20% revenue growth with an attractive valuation as the company further scales margin and cash flow.”

While we acknowledge the potential of DDOG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.