10 Best Predictive Analytics Stocks to Invest in Now

2. Datadog, Inc. (NASDAQ:DDOG)

Analyst upside as of November 11, 2024: 24%

Datadog, Inc. (NASDAQ:DDOG) is a software company that offers an observability platform for developers. The platform helps developers build, test, monitor, optimize, and secure their software. Some of its notable customers include Samsung, Peloton, HashiCorp, and 21st Century Fox.

Datadog, Inc. (NASDAQ:DDOG) introduced metric forecasts for predictive monitoring in Datadog in 2017, evidence that the company’s interventions within this industry are not recent. In early 2023, the company launched an integration in the Datadog platform. InsightFinder is a platform that leverages AI-backed predictive analytics to forecast incidents. The integration helped users find problems in the data swiftly and prevent production outages.

Fast forward to 2024, the company is leveraging machine learning to recognize anomalies, forecast to prevent bottlenecks, detect outliers, and identify root causes. In 2024, Datadog, Inc. (NASDAQ:DDOG) was recognized as a leader in digital experience monitoring and observability in the 2024 Gartner Magic Quadrant. DDOG’s digital experience platform encompasses monitoring and testing, product analytics, session replay, and real user monitoring.

Overall, the company grew its revenue by 26% year-over-year in the third quarter of 2024. Its CEO takes pride in its platform which helps customers observe and secure their mission-critical cloud applications while also being able to forecast events and manage operations. This explains why analysts are bullish on the stock. Their median price target of $152 represents an upside of 24% from current levels, as of November 11.

Baron Opportunity Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q2 2024 investor letter:

“In our view, the enterprise software winners will have to be better at delivering AI services and features than build-your-own AI tools, and they will have to use their incumbency or leadership advantages to ward off upstarts. We believe the winners will be the ones that have a well-established product development culture of innovation and iteration; differentiated proprietary, industry, and customer data; distribution advantages with large customer bases, successful go-to-market efforts, and key partners; well-designed workflows where AI improves the user interface, intelligent predictions/recommendations, and automation; and established always-on connectivity and feedback from their customers; among other things.

Here are a few examples of our software investments that we believe are AI winners: Datadog, Inc. (NASDAQ:DDOG), a cloud observability platform that the leading LLM providers are using today to monitor their AI apps; these AI customers are already driving nearly $100 million of annual recurring revenue for Datadog already.”