From The Motley Fool · Trevor Jennewine · · 1m 20s
AI Boom Shifts to Software: 2 Stocks Wall Street Recommends
Wall Street analysts identify Amazon and Datadog as key beneficiaries as AI adoption expands beyond semiconductors.
In brief
Wall Street analysts identify Amazon and Datadog as key beneficiaries as AI adoption expands beyond semiconductors. Morgan Stanley analysts recommend Amazon and Datadog as AI adoption grows, with Amazon expected to hit 17% operating margins by 2028 and Datadog's valuation appearing expensive despite strong growth…
AI Boom Enters New Phase
The AI boom began with ChatGPT's launch in November 2022, driving aggressive investment cycles.
Morgan Stanley's Inflection Point
Analysts say the AI trade will shift from infrastructure to software companies and ai adopters by 2028.
Amazon: AI Efficiency Gains
Amazon uses ai and robotics to optimize inventory, delivery, and warehouse operations, improving margins.
Amazon's Margin Growth
Amazon's trailing-12-month operating margin expanded over 3 percentage points to 12.1% in the last quarter.
Amazon's 2028 Projection
Morgan Stanley expects amazon's operating margin to reach 17% by 2028 as ai adoption grows.
Datadog: AI Monitoring Software
Datadog provides ai-powered observability tools for infrastructure and application monitoring.
Datadog's Q2 Results
Datadog reported 36% revenue growth to $1.1 billion and 41% non-gaap earnings growth in q2.
Datadog's Valuation Concern
Datadog's current valuation of 104 times adjusted earnings appears expensive despite strong growth.
What it means
Morgan Stanley analysts recommend Amazon and Datadog as AI adoption grows, with Amazon expected to hit 17% operating margins by 2028 and Datadog's valuation appearing expensive despite strong growth.
