Growth Potential for Datadog and The Trade Desk Amidst Market Volatility

Stock analyst insights reveal time to consider Datadog and The Trade Desk, as both companies are recovering from year-to-date losses and exhibiting robust revenue growth of 25%. With significant demand in AI tools & advertising space, investment opportunities emerge.

Date: 18-05-2025

AI Rating: 8

**Market Overview**
The report highlights two tech-focused companies, Datadog and The Trade Desk, both demonstrating robust growth potential. Datadog's stock has shown a year-to-date decrease of 17%, while The Trade Desk has dropped 34.5%. However, both companies are bouncing back post-earnings announcements, both reporting a year-over-year revenue growth of 25%.

**Key Financial Metrics**
1. **Datadog**:
Revenue for the first quarter reached $762 million, representing a 25% growth from the previous year. This impressive figure suggests a strong demand for Datadog’s AI monitoring tools amidst increasing investments in cloud computing. Furthermore, the company successfully signed eleven new deals with significant contract values, showing resilient business demand, particularly from large enterprises.

2. **The Trade Desk**:
Similar to Datadog, The Trade Desk showcased a promising performance with a 25% revenue growth on a year-over-year basis in Q1. This growth provides reassurance amid looming concerns regarding advertising spending in a fluctuating economic environment. The company is focusing on digital ads outside expansive platforms dominated by tech giants, which could signify ample growth opportunities as digital advertisement continues to expand.

**Investment Potential**
Both stocks still trade significantly below their recent highs—over 50% for Datadog—making them interesting for long-term investors looking for entry points. Datadog operates in a competitive but lucrative market, projected to reach $81 billion by 2028, offering substantial growth potential in a rising AI landscape. Meanwhile, The Trade Desk is expected to grow annual earnings at a rate of 31%, supported by innovations in digital advertising technology. Investors should note that both companies exhibit solid fundamentals amidst market volatility.

Taking account of the potential and current market positioning of Datadog and The Trade Desk, both appear poised for recovery and growth. Investors might consider these stocks as viable candidates for short to medium-term investments given their strong revenue momentum and market positioning.

Stocks: DDOG TTD