10 High-Valuation Stocks to Buy According to Billionaires

7. Datadog Inc. (NASDAQ:DDOG)

Forward P/E: 55.9

Number of Billionaire Investors: 17

Number of Hedge Fund Holders: 83

Datadog Inc. (NASDAQ:DDOG) is a cloud-native monitoring and security platform that provides real-time observability for IT infrastructure, applications, and security environments. The company serves enterprises by offering comprehensive analytics across logs, metrics, traces, and network performance, enabling DevOps and IT teams to optimize operations and enhance cybersecurity.

Around February 14, TD Cowen analyst Andrew Sherman reaffirmed a Buy rating on the company with a $165 price target. He highlighted the strong 25% revenue growth in latest quarter which surpassed the 21% guidance, and a high of $1 billion in bookings. Additionally, Datadog Inc. (NASDAQ:DDOG) witnessed its net retention rate improve and recorded its highest new customer additions of the year. Sherman also believes that the optimism around AI-native systems, log solutions, and sales expansion indicate further growth.

Further, the analyst considers the revenue guidance as conservative, suggesting potential upside. As per him, sales and marketing expenses are expected to rise as hiring accelerates, which reflect strong demand. Management’s focus on AI-native solutions and log management strengthens Datadog’s competitive edge. In addition, company’s $3 billion in annual recurring revenue and strong free cash flow margins, keep the company a top investment opportunity.