Dynatrace, Inc. (DT): Accelerating Growth with AI and Logs on Grail
Northland Securities recently issued a rating for a stock amidst the DeepSeek AI frenzy. The firm noted that it isn't concerned about the AI models just yet and that it doesn't expect big tech giants to cut their capital expenditures when they report their earnings either. In light of this, the CEOs of tech giants such as Meta and Microsoft have recently defended their massive spending, noting how it was crucial to stay competitive in the new field.
Investors panicked after news spread over the weekend about a Chinese startup DeepSeek having released AI models that were built using less power and chips. In response, executives of tech giants are saying that building huge computer networks has been crucial to serving growing corporate needs. Even then, investors have been losing their patience with the huge amounts of spending and a dearth of hefty payouts.
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DeepSeek has been causing a stir in the AI world and refuted the gap that previously existed between the AI capabilities in China and the US. After the first Chinese version of ChatGPT was released, there was a lot of disappointment in China considering it was not on par with ChatGPT. However, DeepSeek's AI models have shifted the AI narrative completely.
Not only has it sparked a frenzy in the US, but even its domestic competition has been pressurized. This was made evident when Alibaba released a rival to DeepSeek's model on the Lunar New Year. According to the company, the 'Qwen 2.5-Max outperforms … almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B'. Even though DeepSeek's AI models have been impressive, there is still skepticism and confusion regarding the demand for high-end AI chips and the need for power to run AI-centric data centers.
'There's plenty of uncertainty over what the true demand for state-of-the-art chips, semiconductor fabrication plants and energy will be'.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points ().
A software engineer coding at a computer, surrounded by a cluttered desk of hardware.Dynatrace, Inc. (NYSE:DT) provides a software intelligence platform for monitoring and optimizing applications, infrastructure, and user experiences. On January 30, William Blair analyst Jake Roberge maintained their bullish stance on the stock, giving a 'Buy' rating. The firm highlighted Dynatrace's (NYSE:DT) impressive third-quarter performance for its optimism, which exceeded market expectations in key areas. The company has also benefitted from its Dynatrace Platform Services (DPS) customers, a major driver of its subscription revenue growth. The company's on-demand consumption trend is expected to continue, offering it a long-term growth opportunity as customers renew at higher tiers. Additionally, the company has made noteworthy advancements in its go-to-market strategy, with enhancements in pipeline development and enterprise deal closures. This is despite challenges in its commercial segment. Growth prospects were further bolstered by factors such as engagement with AI technologies and the rapid adoption of its Logs on Grail product, a log management and analysis feature within the Dynatrace (NYSE:DT) platform.
Overall, DT ranks 4th on our list of must-see AI news and ratings you might have missed. While we acknowledge the potential of DT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DT but that trades at less than 5 times its earnings, check out our report about the .
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
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