Wall Street Analysts Agree on Undervalued AI Stocks

Analysts are united in believing certain AI stocks are undervalued. This presents a unique investment opportunity for those looking to capitalize on future growth potential in the technology sector.

Date: 07-03-2025

AI Rating: 7

Investment Insights: The report highlights three major AI stocks—Microsoft, Dell Technologies, and DataDog—with a consensus among analysts that these shares are currently undervalued. This kind of unanimous opinion seldom occurs, suggesting a strong upside potential for investors willing to enter these positions now.

Microsoft Analysis: Microsoft is experiencing remarkable revenue growth, particularly from its Azure cloud services, which saw a 31% year-over-year increase last quarter. Moreover, its AI Services segment has seen growth of 157% year over year. Given Microsoft's ability to generate significant free cash flow, the stock is considered to likely trend upwards, reflected in a higher-than-average earnings multiple.

Dell Technologies Overview: Dell's AI server business is driving performance, with a substantial 54% increase in server sales last year. Despite a 1% decline in revenue from PC sales, the robust demand in the AI segment indicates a promising outlook. A healthy backlog worth $9 billion bodes well for future revenue streams.

DataDog's Prospects: DataDog's innovative product expansions and high net dollar-based retention rates (high 110% last year) suggest continued revenue stability. The company's strategy of enhancing its product suite increases customer retention and enhances overall sales growth potential. With strong revenue growth projected above 20%, the elevated price reflects its ongoing performance.

Stocks: MSFT DELL DDOG