Morgan Stanley believes the AI trade will broaden from chipmakers and infrastructure to software firms and businesses that use AI to cut costs. Amazon (AMZN) is using AI and robotics to improve retail efficiency, and its trailing-12-month operating margin rose more than 3 percentage points over two years to 12.1%; Morgan Stanley expects it to reach 17% by 2028. Datadog (DDOG) reported second-quarter revenue up 36% to $1.1 billion and non-GAAP earnings up 41% to $0.65 per diluted share, and raised its full-year revenue growth guidance to 30%. However, with the stock at 104 times adjusted earnings, the author considers its valuation rich and Datadog a risky investment.
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artificial intelligenceNVDAMorgan Stanleyvaluationearnings
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Related tickers and likely impact
NVDA
▲ Likely positiveNvidia
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/16/2026 | 214.14 |
| Change that session | -1.42% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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