Fascination in technology stocks is not a new phenomenon by any means. While the recent massive meltdowns of some of the highest profile companies have changed many investors’ ideas about the sector, like all market hiccups, this too shall end. The big question for investors, especially those looking for bargains, is which companies are the ones to go after now.
Similar to the dot-com meltdown in 2000 and 2001, the companies with great ideas but not making money are once again the prime target for the sellers, many of which are of the short-sale variety. However, one big difference this time is some of the biggest and most prominent stocks have been fed to the wolves. Facebook parent Meta Platforms, along with Amazon, Alphabet, Netflix, Apple and other household names, have all been crushed.
We decided to see what the premier investment bank on Wall Street felt were the top tech stocks to buy now. We screened the Goldman Sachs Americas Conviction List of top picks and found five outstanding software companies, including one legacy heavyweight. While they all have the highest rating at Goldman Sachs, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This is a name investors may not be as familiar with, but it holds tremendous upside potential. Datadog Inc. (NASDAQ: DDOG) engages in the development of monitoring and analytics platforms for developers, information technology operations teams and business users. The company’s platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide real-time observability of its customers’ entire technology stack.
Datadog announced last year the extension of Network Performance Monitoring (NPM) to Windows. Datadog NPM now monitors the performance of network communications between applications running on Windows Server and Linux, providing seamless network visibility across cloud environments, on-premises data centers and operating systems.
The analysts noted earlier this year that, based on the strength of its expanding product portfolio that addresses critical aspects of customers’ cloud migration, coupled with a solidly profitable business model that generates rising free cash flow margins alongside hyper-growth, Datadog is poised to grow into a preeminent infrastructure software business.
Goldman Sachs has a $162 price target on Datadog stock, while the consensus target is $114 and Tuesday’s final print was $70.49. Hitting the Goldman Sachs price objective would be a 133% gain.
This is a more conservative way for investors to participate in the massive cloud growth. Microsoft Inc. (NASDAQ: MSFT) develops, licenses and supports software, services, devices, and solutions worldwide. The company operates in these three segments.
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