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This software stock 'should benefit big from AI' says Bank of America
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Bank of America analysts defend software stock Datadog, which reported Q1 2024 financial results that beat expectations. The company's net income for the quarter was $42.6 million, compared to a net loss of $24.1 million the previous year. On an adjusted basis, Datadog earned 44 cents per share, surpassing the FactSet consensus of 34 cents. Revenue increased to $611 million, a 27% increase from the previous year. Bank of America analysts believe that Datadog stands to benefit from artificial intelligence (AI) and digital transformations in the long term, citing the increase in remaining performance obligations (RPO) and big deal commentary. However, they caution that the risk/reward scenario might remain balanced until the company transitions from 'should benefit from AI' to 'really benefiting from AI.' Datadog's net-new annual recurring revenue (ARR) was the highest since Q4 2021, and analysts estimate that ARR grew by 27% year-over-year. The bank believes that the true AI growth driver for Datadog will be when non-AI native companies deploy AI applications at scale. Bank of America analysts reiterated a Neutral rating on DDOG and trimmed their 12-month price target from $144 to $143. For Q2, Datadog projects revenue between $620 million and $624 million, with adjusted earnings per share ranging from 34 to 36 cents.
#BankOfAmerica #Datadog #ArtificialIntelligence #FinancialResults #RevenueGrowth #SoftwareStock
https://uk.investing.com/news/stock-market-news/this-software-stock-should-benefit-big-from-ai-says-bank-of-america-432SI-3490147
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Bank of America analysts defend software stock Datadog, which reported Q1 2024 financial results that beat expectations. The company's net income for the quarter was $42.6 million, compared to a net loss of $24.1 million the previous year. On an adjusted basis, Datadog earned 44 cents per share, surpassing the FactSet consensus of 34 cents. Revenue increased to $611 million, a 27% increase from the previous year. Bank of America analysts believe that Datadog stands to benefit from artificial intelligence (AI) and digital transformations in the long term, citing the increase in remaining performance obligations (RPO) and big deal commentary. However, they caution that the risk/reward scenario might remain balanced until the company transitions from 'should benefit from AI' to 'really benefiting from AI.' Datadog's net-new annual recurring revenue (ARR) was the highest since Q4 2021, and analysts estimate that ARR grew by 27% year-over-year. The bank believes that the true AI growth driver for Datadog will be when non-AI native companies deploy AI applications at scale. Bank of America analysts reiterated a Neutral rating on DDOG and trimmed their 12-month price target from $144 to $143. For Q2, Datadog projects revenue between $620 million and $624 million, with adjusted earnings per share ranging from 34 to 36 cents.
#BankOfAmerica #Datadog #ArtificialIntelligence #FinancialResults #RevenueGrowth #SoftwareStock
https://uk.investing.com/news/stock-market-news/this-software-stock-should-benefit-big-from-ai-says-bank-of-america-432SI-3490147