Wedbush Securities just came out with a bullish note on Datadog (DDOG) and added the name to its AI 30 list. Analysts believe the company is an excellent choice for investors betting on derivative beneficiaries of the AI boom.

Datadog’s bull thesis isn’t just the fact that AI infrastructure spending is going strong. The company initially offered infrastructure monitoring products but has now moved on to digital experience monitoring, software delivery, product analytics, AI observability, and similar services. This isn’t just a case of diversification. IT systems are becoming more and more complex with AI integration — and the more complex they become, the more they need Datadog’s products and services. Investors right now are focused on the supply shortages in building AI infrastructure. What they haven’t yet considered is that once that infrastructure is up and companies start using AI in production, they will need to scale up operations to make that possible. Datadog has an early-mover advantage to capture that market, whenever it shows up.

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Another factor that makes Datadog special is that it is infrastructure-agnostic. We already know that, one way or another, AI infrastructure will get built. By investing in Datadog, investors are betting that whoever builds that infrastructure will need Datadog’s services to monitor, secure, and optimize AI workloads. In other words, as AI and cloud workloads continue to scale, Datadog becomes the ultimate beneficiary, irrespective of who is doing the scaling.

About Datadog Stock

Datadog provides an observability service for cloud-scale applications as well as monitoring and analytics for servers, databases, tools, and services, delivered via a Software-as-a-Service (SaaS) data analytics platform. The company's product portfolio includes observability pipelines, product analytics, database monitoring, error tracking, workflow automation, and the App Builder.

Over the past year, DDOG stock has delivered strong gains of around 96%. In comparison, the Global X Cloud Computing ETF (CLOU) has generated returns of about 3% during the same period, showing that DDOG has significantly outperformed the broader industry. The strong momentum has continued this year as well, with Datadog gaining approximately 65% year-to-date (YTD) versus the exchange-traded fund's (ETF) roughly 2% return.