2 Stocks Positioned for the Rise as AI Self‑Healing Systems Move From Concept to Core Infrastructure

AI is entering a radical new phase that goes above and beyond generative AI and chatbots. Undoubtedly, with Palantir (NASDAQ:PLTR | PLTR Price Prediction) clocking in a jaw-dropping Q2 beat while Claude Mythos changed the cybersecurity world and a few AI agents went rogue (models from OpenAI and Anthropic), I think we’ve moved above and beyond that initial hype phase.

With ROI and monetization in sight while some firms, like Palantir and Anthropic, prove that the money-making potential of enterprise AI is very much the real deal, questions linger as to where the technology could be taking us and the economy next, and whether there’s something that’s just a bit more interesting than just the “picks and shovels” plays in the semiconductor names, especially as the crowded trade looks to give back more of the year-to-date gains.

Whether it’s the dangerous AI agent breaches or the explosive value being unlocked within the enterprise by Palantir’s agents, it feels like enterprise software and cybersecurity are never going to be the same. And the big question, in my view, is which industries will be next to be shifted in a drastic way. Indeed, perhaps every industry is bound to change in a profound way as agents move further into the mainstream.

As we shift gears from observability of AI agents towards autonomous “self-healing” systems and concepts such as recursive self-improvement (RSI), which is what AI labs seem to be shooting for, questions linger as to what kind of transformation the corporate world could face once the AI buildout gets compute to a level to power such next-level applications at scale. Indeed, a bit of an experimental phase is bound to hit, but after that, the possibilities could be difficult to fathom.

Palo Alto Networks (NASDAQ:PANW) and Datadog (NASDAQ:DDOG) stand out as firms that could win as AI agents begin to fix issues shortly after they spot them.

Palo Alto Networks

Palo Alto Networks is a name that didn’t take long to rebound from the SaaS-pocalypse earlier this year. Despite that bump in the road, shares are still up 114% in the past year at a fresh all-time high just shy of $360 per share. With rogue AI agents and soaring cyberthreats boosting the industry, perhaps Palo Alto Networks is a name that could have runway, especially as the firm looks to not only spot threats, but contain them, roll things back, and run an autonomous real-time defence.

The Cortex XSIAM (Extended Security Intelligence and Automation Management) is equipped to take control against a threat or breach, take care of things, and roll things back, effectively fixing any damage that a breach may have caused.

Indeed, the technology is a thing of science fiction, but in the agent era, it’s the modern way to do cybersecurity. While the stock has been hot of late, I still think the name isn’t getting the respect it deserves as it looks to rise to become the next big winner in AI software.

Datadog

Datadog shares took a brutal bruising on Thursday, with shares tumbling 19% after a decent quarter that failed to meet sky-high expectations going into the number. There was nothing wrong with the quarter, perhaps other than the fact that it wasn’t a shocking blowout. Add the margin pressures from agentic AI tooling spend into the equation, and perhaps it’s no mystery as to why so many weak hands are departing the name.

In my view, the dip in the observability play is a great buying opportunity as the firm looks to prove itself as another AI software star that can effectively monetize in this agentic era. Indeed, hyper-growth and sky-high margins may very well be in the cards for the software companies that effectively harness the power of AI and agents.

As the firm looks to take things several steps beyond just monitoring, I do think Datadog stands out as a firm that can win big once self-healing systems rise, thanks in part to its telemetry moat, which is an absolute must for an agent to respond in real-time. With the Bits AI agent moving fast, it feels like auto-fix could mark the next frontier. Of course, perhaps there’s no better firm to keep agents operating on the rails than the number-one watchdog that is Datadog.

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