Artificial Intelligence-related stocks continue to be the top tech trend. Many of the big names are growing by leaps and bounds, and smaller firms are retooling to catch up. But that’s just one tech trend out there.
Other trends are also at play, and also continue to show signs of strong growth. That includes tech trends that utilize AI tools themselves, particularly software plays. Investors should look for leaders in such tech plays.
One overlooked software play is in cybersecurity. Digital threats continue to evolve, and companies need to adapt accordingly, particularly when data is stored or sent via the cloud.
That’s where a company like Datadog (DDOG) can come into play. The cybersecurity software company just reported a strong quarter that beat expectations, and revenues are up 27% over the past year.
Datadog also increased their annual forecast that they expect AI-driven cybersecurity demand to rise.
Shares are up 28%, underperforming the stock market overall, but continued high growth can result in strong earnings growth over time.
Action to take: Datadog hit a yearly low over the summer and has been trending higher since. Momentum investors may like shares here, given the rising price and earnings beat.
For traders, the March 2025 $140 calls, last trading for about $8.25, could see low-to-mid double-digit returns on a further uptrend from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.