2 Overlooked AI Stocks Poised for 112% and 196% Gains, Per Wall Street

Key Insights

Numerous Wall Street analysts anticipate significant growth potential for The Trade Desk and Datadog, with the broad consensus indicating that both companies’ shares remain undervalued at their present levels. The Trade Desk leverages advanced artificial intelligence technologies to assist media professionals in refining and enhancing the effectiveness of their digital advertising initiatives. Meanwhile, Datadog employs AI-driven solutions to enable large organizations to anticipate, identify, and address performance bottlenecks and security vulnerabilities within their software applications.

Artificial intelligence-related equities have driven roughly three-quarters of the S&P 500’s impressive gains since the introduction of ChatGPT toward the end of 2022, as noted by analysts at JPMorgan Chase. Nevertheless, certain experts on Wall Street continue to highlight considerable appreciation opportunities in The Trade Desk and Datadog. For instance, Mark Kelley from Stifel recently assigned The Trade Desk a price target of $74 per share, suggesting a potential 196% increase from its recent trading level around $25. Similarly, Brian White at Monness established a $255 per share target for Datadog, pointing to a possible 112% rise from approximately $120 per share.

It is worth noting that while the majority of analysts tracking these two firms do not project such dramatic triple-digit surges within the coming year, the prevailing view supports the notion that both stocks are currently trading below their intrinsic value. The following sections delve into the specifics supporting these perspectives.

The Trade Desk: Analysts’ Consensus Target Suggests 100% Potential Upside

The Trade Desk specializes in developing advertising technology software designed to empower media buyers with tools for meticulously planning, accurately measuring, and dynamically optimizing their digital advertising efforts. At the core of its platform is sophisticated artificial intelligence, which meticulously assesses individual ad impressions, tailors bidding strategies, and iteratively adjusts targeting criteria using live performance metrics to maximize campaign outcomes.

A key differentiator for The Trade Desk is its independent operational model, which ensures it does not possess or control any media inventory that might influence or skew advertising expenditures toward proprietary assets. In contrast, competitors such as Alphabet’s Google and Amazon possess inherent motivations to direct media budgets toward their own platforms, including YouTube and Prime Video, creating potential conflicts of interest. The Trade Desk sidesteps these issues entirely.

This neutrality proves advantageous because publishers and content providers are far more inclined to share comprehensive data with The Trade Desk. Consequently, its targeting algorithms and measurement capabilities become exceptionally precise and effective, particularly for advertising across the open internet—a vast, distributed ecosystem encompassing independent websites, mobile applications, and streaming platforms outside the dominance of major tech conglomerates like Google or Amazon.

The Trade Desk holds a dominant position as the premier media buying platform within this open internet landscape, boasting especially robust traction in connected TV advertising, which ranks among the most rapidly expanding segments of the digital ad market. Despite these strengths, the company’s stock has plummeted approximately 80% from its all-time peak, largely due to investor apprehensions that generative AI innovations, such as ChatGPT, could dampen advertising budgets allocated to non-walled-garden environments.

From my viewpoint, these concerns from investors hold some validity, yet the shares appear to be excessively discounted at current levels. Projections from Wall Street indicate that The Trade Desk’s adjusted earnings will expand at a compound annual rate of 13% through 2026, rendering its forward valuation of 15 times earnings notably attractive. Although achieving a 196% return within the next 12 months seems improbable, the prevailing price point offers a compelling entry opportunity for discerning investors.

This assessment aligns closely with the broader analyst community covering The Trade Desk. The median price target stands at $50 per share, which would represent a full 100% appreciation from the recent price of $25, underscoring widespread belief in substantial undervaluation.

Datadog: Consensus Target Points to 50% Upside Potential

Datadog focuses on creating comprehensive observability and security platforms for enterprise environments. Its unified interface aggregates data streams from across the full technology stack—including infrastructure, applications, and third-party services—into a centralized dashboard, streamlining the process of troubleshooting problems and mitigating security risks. Central to its offerings is an integrated AI-powered engine called Watchdog, capable of pinpointing irregularities, issuing proactive alerts for incidents, and conducting automated root cause investigations.

Datadog consistently earns top accolades from leading independent research organizations. Gartner positions the company as a frontrunner in both digital experience monitoring and observability solutions, markets expected to achieve annual growth rates of around 16% extending to 2030. Likewise, Forrester Research recognizes Datadog as a leader in AI-driven IT operations, a sector forecasted to expand at 15% per year through the same timeframe.

Keith Weiss, an analyst at Morgan Stanley, emphasizes that Datadog has maintained its status as the fastest-growing player in the core observability space for multiple consecutive years. This success stems from enterprise IT teams increasingly favoring integrated platforms that consolidate diverse monitoring functionalities into one cohesive system. Furthermore, Datadog has expanded its portfolio with specialized tools for overseeing AI workloads and is actively deploying intelligent AI agents to automate responses to incidents and enhance threat detection protocols.

In its most recent fourth-quarter results, Datadog delivered adjusted earnings growth of 20%, reflecting robust momentum. That said, this performance positions the stock at a forward multiple of 60 times earnings, which might appear steep on the surface. However, the company is strategically investing substantial resources into research and development to fuel accelerated expansion ahead, creating a foundation for earnings acceleration in subsequent periods. While triple-digit gains over the next year remain unlikely, shares present an attractive prospect for investors with a long-term horizon.

The sentiment among most Wall Street analysts tracking Datadog echoes this balanced outlook. With a median price target of $180 per share, the implied 50% upside from the current $120 level reinforces the view that the stock offers meaningful value in today’s market.