5 Best High Risk High Reward Stocks to Buy Now

1. Datadog, Inc. (NASDAQ:DDOG)

Price-to-Sales Ratio as of August 1: 25.59

Number of Hedge Fund Holders: 82

Datadog, Inc. (NASDAQ:DDOG) is among the pioneers of monitoring and observability services for cloud-scale applications. The company provides data analytics and various tools and services for IT operations teams worldwide. While analysts are reducing their forecasts across the software sector on macro headwinds and peer multiple contractions, Wall Street is bullish on Datadog, Inc. (NASDAQ:DDOG). On July 22, Citi analyst Fatima Boolani lowered her price target on Datadog, Inc. (NASDAQ:DDOG) to $175 from $195 but reiterated a Buy rating on the shares.

On July 25, RBC Capital analyst Matthew Hedberg trimmed his price target on Datadog, Inc. (NASDAQ:DDOG) to $115 from $167 but maintained an Outperform rating on the shares. Hedberg noted that the company’s platform strategy is a success and its products are in demand. The analyst sees the potential for long-term elevated growth and margin improvement for Datadog, Inc. (NASDAQ:DDOG).

At the close of Q1 2022, 82 hedge funds were long Datadog, Inc. (NASDAQ:DDOG) and held stakes worth $4.86 billion in the company. This is compared to 73 positions in the previous quarter with stakes worth $5.69 billion.

As of March 31, Lone Pine Capital owns roughly 3 million shares of Datadog, Inc. (NASDAQ:DDOG) and is the largest shareholder in the company. The investment covers 2.67% of Lone Pine Capital’s 13F portfolio.

Here is what Baron Funds had to say about Datadog, Inc. (NASDAQ:DDOG) in its “Baron Global Advantage Fund” first-quarter 2022 investor letter:

“Another example is Datadog, the leading infrastructure monitoring, application performance monitoring and log management software platform. Datadog’s stock declined 15% during the quarter, despite reporting sparkling operational results, with revenues accelerating to a growth rate of 84% year-over-year with 33% free cash flow margins, while guiding for 2022 significantly above expectations. Datadog added 4,600 new customers in the quarter, while existing customers continued to increase their spending on Datadog products at a rapid pace with the number of customers using four or more products increasing to 33% from 22% last year. While Datadog’s stock was down, its intrinsic value has undoubtedly increased. This is enabled by rapid innovation (Datadog released 13 new products in 2021) into a market that is benefiting from the secular growth in cloud, digital transformation, and the explosion in complexity as the number of vendors, diversity of technologies and related infrastructure continued to expand.”

You can also take a look at 14 Best Low Risk Stocks To Buy Now and 10 Best High Risk Stocks to Buy Right Now.

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