Datadog and The Trade Desk, two prominent U.S. tech firms, have both drawn renewed interest from Wall Street analysts—signalling investor appetite for growth plays in cloud and ad-tech amid a cautious global economy. The upgrades arrive in a broader context of slowing global growth, shifting ad-spend patterns and increasing enterprise investment into AI and security tools.

Datadog’s Strength: AI, Security and Upgraded Outlook

For Datadog, the upgrade from KeyBanc reflects confidence in its expanding footprint in monitoring, security and observability services—especially as enterprises integrate AI into operations. The company beat third-quarter revenue expectations, posting a 28 % year-on-year increase to about $885.7 million and raising its full-year guidance.
Analysts pointed to growing large-client counts and elevated spending by AI-native customers as key drivers of the upgrade decision. Given its recent entry into the S&P 500 and rising demand for cloud security, Datadog is viewed as well-positioned for secular growth—albeit in a competitively crowded market.
However, with macro risks such as IT budget stagnation and rising interest rates, investors will be watching whether Datadog can maintain its margin profile and continue accelerating growth beyond near-term beats.

The Trade Desk: Ad-Tech Momentum and Valuation Reset

The Trade Desk’s upgrade by Benchmark and target-raise by UBS underscore renewed optimism around its ad-tech platform and growth prospects. Benchmark raised its rating to “Buy” with a $65 target, suggesting roughly 50% upside from recent levels. Meanwhile, UBS lifted its target to $82, emphasising expectations that revenue growth will re-accelerate from Q2 2026 onward.
Despite the high valuation multiples and a recent weak span, the company’s Q3 results showed 17.7 % revenue growth to about $739 million and an EPS beat (reported at $0.45) – reinforcing its ability to deliver even amid ad-spend uncertainty.
Nevertheless, The Trade Desk still faces headwinds: intense competition, shifts in TV/streaming ad formats, and macro pressure on brand-advertiser budgets. Investors will monitor how the company navigates the open-internet vs closed-garden dichotomy in ad-tech.

Implications for Global and Israeli Investors

For investors in Israel and globally, these two upgrades reflect broader themes: cloud/AI infrastructure for enterprises (Datadog) and digital advertising transformation (The Trade Desk). Israeli tech-ecosystem players — many with exposure to cloud, cybersecurity or ad-tech — may feel the ripple effect of shifting investment flows into these niches.
Moreover, for global markets, the readiness of analysts to upgrade despite macro uncertainty signals a belief that growth-oriented tech can still carve out upside. That said, the timing and sustainability of that upside remain key questions.

Looking ahead, market participants will be watching upcoming earnings calls and guidance for signs of momentum sustainability. For Datadog, key metrics include large-client growth (> US$100k ARR), AI-driven spend uptake and margin expansion. For The Trade Desk, the focus will be on ad-spend recovery, margin leverage, product innovation (e.g., connected-TV) and competitive positioning. Risks such as slower enterprise IT spending, rising ad-tech competition or regulatory pressure remain. On opportunity, secular growth in AI and digital advertising continues to provide a backdrop for these analysts’ bullish tilt.