Key Takeaways
- Wall Street analysts forecast significant gains for Meta Platforms and Datadog in 2026
- Meta Platforms has a median target price of $840 per share, implying 29% upside from its current share price
- Datadog has a median target price of $216 per share, implying 62% upside from its current share price
- Both companies are investing heavily in artificial intelligence product development
- Meta Platforms and Datadog have reported solid financial results, with revenue increasing 26% and 28% respectively in the third quarter
Introduction to Meta Platforms and Datadog
The technology-heavy Nasdaq Composite index has been through six bull markets since 1990, with the average one lasting for five years and returning 31% annually. This hints at substantial upside in 2026, and investors can lean into this possibility by owning shares of Meta Platforms and Datadog. As stated in the article, "Meta Platforms owns three of the four most popular social media networks as measured by monthly active users. Applications like Facebook and Instagram afford the company deep insight into consumer preferences, which continuously inform content recommendations and ad targeting decisions." Meta is also the second largest ad tech company in the world, positioned to gain market share, according to Morningstar.
Meta Platforms’ Artificial Intelligence Efforts
Meta has been spending heavily on artificial intelligence (AI) product development, with custom chips reducing its dependence on costly Nvidia GPUs, proprietary machine learning models personalizing the user experience, and AI creative tools automating campaign workflows for brands. As the article notes, "Those efforts have led to deeper engagement and better ad performance, allowing the company to charge more per ad impression." Additionally, Meta’s conversational assistant, Meta AI, has accumulated more than 1 billion monthly active users, providing the company with yet another way to collect valuable user data to inform content recommendations and ad targeting. The article quotes, "Meta integrates its AI assistant with smart glasses, which could be a substantial opportunity in the years ahead."
Meta Platforms’ Financial Results
Meta reported encouraging financial results in the third quarter, with revenue increasing 26% to $51 billion and GAAP net income (excluding a one-time tax charge) increasing 20% to $7.25 per diluted share. However, the stock dropped sharply following the report because Meta announced plans to spend more aggressively on AI product development in 2026. Despite this, the stock is currently 18% below its record high, creating an opportunity for patient investors. As the article states, "Meta trades at 29 times earnings, a very reasonable price for a company whose earnings increased 20% in the most recent quarter."
Datadog’s Artificial Intelligence Efforts
Datadog develops observability and security software that helps enterprises monitor the performance of critical applications and infrastructure. The company has embedded its products with machine learning capabilities, including Watchdog, an AI engine that proactively detects anomalies, surfaces alerts, and automates root cause analysis. As the article notes, "Every data point improves its ability to complete those tasks." Datadog has also introduced Bits AI agents that autonomously investigate alerts, suggest code fixes, and review security signals to help IT teams resolve incidents. The article quotes, "Datadog has leaned into demand for generative AI with LLM Observability, a performance monitoring module that ensures large language models are working properly."
Datadog’s Financial Results
Datadog reported solid financial results in the third quarter, with revenue increasing 28% to $886 million as the company won new customers and existing customers used more products. The average spend per existing customer increased about 20%, and CEO Olivier Pomel mentioned high interest in the new Bits AI agents. Non-GAAP earnings increased 20% to $0.55 per diluted share. As the article states, "Datadog currently trades at 15 times sales, a discount to the three-year average of 16.9 times sales and a reasonable valuation for a company whose revenue is forecast to grow at 21% annually through 2027."
Conclusion
In conclusion, both Meta Platforms and Datadog are well-positioned for significant gains in 2026, with a median target price implying 29% and 62% upside respectively. The companies’ investments in artificial intelligence product development and solid financial results make them attractive investment opportunities. As the article notes, "Investors can lean into that possibility by owning shares of Meta Platforms and Datadog." With their strong positions in the technology industry and growing demand for artificial intelligence, these companies are likely to continue to perform well in the coming year.
https://www.fool.com/investing/2026/01/05/nasdaq-will-soar-2-ai-stocks-buy-now-wall-street/