The Motley Foolยท2025-11-05 08:52Industry Overview - Capital spending related to artificial intelligence (AI) contributed over one percentage point to U.S. economic growth in the first half of 2025, surpassing consumer spending as the main growth driver [1] - Morgan Stanley analysts project AI sales in cloud and software sectors will grow over 600% to exceed $1 trillion annually by 2028 [2] Company: Alphabet - Alphabet is the largest adtech company globally, leveraging platforms like Google Search and YouTube to engage users and gather consumer data [3] - The company holds the third-largest public cloud in terms of cloud infrastructure and platform services, accounting for 13% of CIPS revenue in Q3, up from the start of the year [4] - Alphabet reported Q3 revenue of $102 billion, a 16% increase from the previous year, with GAAP earnings rising 35% to $2.87 per diluted share [5] - Analysts have a median target price of $330 per share for Alphabet, indicating a 19% upside from its current price of $278 [6] - Earnings are expected to grow at 15% annually over the next three years, making the current valuation of 27 times earnings reasonable [7] Company: Datadog - Datadog specializes in observability software, offering a platform with around two dozen products for monitoring IT infrastructure and applications [8] - The company is recognized as a leader in AI for IT operations and observability platforms, supporting generative AI workloads [9] - Datadog's Q2 revenue rose 28% to $827 million, with non-GAAP earnings increasing 7% to $0.46 per diluted share [10] - Wall Street estimates adjusted earnings will grow at 19% annually through 2028, despite a high current valuation of 84 times earnings [11] - Investors with a long-term horizon are encouraged to consider building a position in Datadog [12]