Two technology companies that posted strong quarterly results are worth considering.
The Trade Desk (TTD) jumped by 12.5% after posting Q2 results. Its revenue rose by 26.1% Y/Y to $585 million. Its EPS of $0.39 beat estimates by three cents.
TTD stock may hold the $100 level and rise from there. Analysts must raise their price targets, especially ahead of the U.S. presentation elections later this year. The firm will benefit from a spike in advertising activity.
Valuation is a risk for TTD stock. Markets valued the firm at $40 billion when it never generated $10 billion in cash flow in its existence.
Datadog (DDOG) has a good chance of breaking out of its $100 - $125 trading range. In the second quarter, the data firm earned $0.43 a share. Revenue jumped by 26.7% Y/Y to $645 million. In Q3, the firm expects revenue of up to $664 million and non-GAAP EPS of $0.38 - $0.40.
Datadog will enjoy more growth ahead. Patient investors need to wait for corporations to continue their investments in AI infrastructures. As that takes shape and matures, Datadog’s addressable market will expand.
Insider selling from employees monetizing their stock-based compensation is a near-term risk. After the selling pressure eases, consider DDOG stock.
