“In the rapidly evolving AI landscape, The Trade Desk and Datadog stand out as undervalued opportunities with substantial growth potential. Certain analysts project The Trade Desk could surge 196% and Datadog 112% based on aggressive price targets, driven by their critical roles in AI-driven advertising and cloud monitoring amid exploding data demands.”
2 Undervalued AI Stocks Poised for Major Gains
The artificial intelligence revolution continues to reshape industries, with spending on AI infrastructure, software, and applications accelerating. While mega-cap names like Nvidia dominate headlines, lesser-discussed players in the AI value chain offer compelling value. Two such stocks—The Trade Desk and Datadog—have caught the eye of select Wall Street analysts for their outsized upside potential.
The Trade Desk operates the leading independent demand-side platform (DSP) for programmatic advertising. Its platform leverages advanced AI and machine learning to optimize ad placements across digital channels, including connected TV (CTV), which has become a high-growth area. Advertisers use The Trade Desk’s tools to target audiences with precision, improving return on ad spend in an era where data privacy changes have made cookie-based tracking less reliable. The company’s AI capabilities enable real-time bidding, predictive modeling, and personalized campaigns, positioning it as a beneficiary of the shift toward AI-enhanced digital marketing.
Despite broader market enthusiasm for AI, The Trade Desk shares have traded at depressed levels relative to peers, creating an entry point. A recent bullish call from Stifel analyst Mark Kelley set a price target implying roughly 196% upside from recent trading around $25 per share, targeting $74. This optimism stems from strong secular trends: digital ad spending growth, CTV expansion, and AI’s role in making advertising more efficient and measurable. The Trade Desk’s independence from walled gardens like Google and Meta gives it an edge in a fragmented market, and its platform’s AI-driven Kokai system enhances targeting and performance.
Datadog provides a cloud monitoring and observability platform that helps enterprises manage complex IT environments, including those running AI models and workloads. As companies deploy generative AI, machine learning pipelines, and massive data processing, they require robust tools to monitor performance, detect anomalies, detect issues in real time, and ensure scalability. Datadog’s unified platform integrates logs, metrics, traces, and AI-powered insights, making it essential for DevOps teams handling AI infrastructure.
Brian White at Monness recently assigned a $255 price target on Datadog, suggesting about 112% upside from levels near $120. This view reflects Datadog’s sticky customer base, high revenue retention, and expansion into AI-specific use cases like monitoring large language models and GPU utilization in data centers. The company’s revenue growth remains robust, fueled by the ongoing cloud migration and AI adoption wave that increases demand for observability solutions.
Both companies benefit from broader AI tailwinds without the extreme valuations seen in pure-play chipmakers. The Trade Desk thrives on AI improving ad efficiency in a $600+ billion global advertising market, while Datadog capitalizes on the explosion in cloud and AI data volumes requiring sophisticated monitoring.
Key Metrics Comparison
| Metric | The Trade Desk (TTD) | Datadog (DDOG) |
|---|---|---|
| Primary AI Role | AI-powered programmatic ads & targeting | Cloud/AI observability & monitoring |
| Recent Share Price (approx.) | ~$25 | ~$120 |
| Bullish Analyst Target | $74 (Stifel) | $255 (Monness) |
| Implied Upside | ~196% | ~112% |
| Key Growth Driver | CTV/digital ad shift + AI optimization | AI workload monitoring + cloud expansion |
| Customer Stickiness | High (platform lock-in) | Very high (enterprise integrations) |
Investors should note that while these analyst targets reflect optimism, stock prices can fluctuate based on earnings execution, macroeconomic factors, and competitive dynamics. The Trade Desk faces competition in ad tech, though its independence provides differentiation. Datadog operates in a crowded observability space but leads in innovation and breadth.
The combination of reasonable valuations, strong fundamentals, and direct ties to AI proliferation makes these two names attractive for those seeking exposure beyond the most obvious players.
Disclaimer: This is for informational purposes only and does not constitute investment advice. Investing in stocks involves risk, including potential loss of principal. Always conduct your own research or consult a financial advisor.
