Top 10 High Flying AI Stocks This Week

8. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 71

Datadog, Inc. (NASDAQ:DDOG) operates an observability and security platform for cloud applications. Its products comprise infrastructure and application performance monitoring, log management, digital experience monitoring, continuous profiler and database monitoring. On January 16, Morgan Stanley downgraded the stock to an equal weight amid concerns over slower growth in the year’s first half.

A point of concern is that Datadog, Inc. (NASDAQ:DDOG) is operating under a tight budget environment that would make it difficult to strengthen its revenue base. Amid the concerns, the Morgan Stanley analysts expect the company’s revenue to grow by about 25% in 2025. It would be a significant slowdown considering Datadog revenue has grown by an average of 37% over the past five years.

The slowdown in revenue growth has to do with AI native customers optimizing their spending on the company’s solution after a period of rapid expansion. Consequently, there are concerns that Datadog, Inc. (NASDAQ:DDOG) might be forced to embark on favorable pricing to hold on to customers, which could result in growth deceleration.