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This Artificial Intelligence (AI) Stock Is Surging After Joining the S&P 500. Can It Continue to Skyrocket?

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  • Datadog stock has gone parabolic in the past three months, and it recently shot up following the news of its inclusion in the S&P 500 index.

  • The stock is trading at an expensive valuation right now.

  • Datadog’s lucrative addressable opportunity suggests that it may be able to justify its valuation in the long run.

  • 10 stocks we like better than Datadog ›

Shares of Datadog (NASDAQ: DDOG) shot up nearly 15% on July 3 after it was revealed that the provider of cloud-based observability, monitoring, and security solutions will join the S&P 500 index on July 9.

Datadog will be replacing Juniper Networks in the index after the latter was acquired by Hewlett Packard Enterprise. It is easy to see why Datadog’s inclusion in the index has sent its stock soaring. To enter the index, a company needs to demonstrate solid profitability in the past four quarters, along with enough liquidity.

Datadog’s inclusion in the S&P 500 over other contenders is a positive for the stock, as it demonstrates the market’s confidence in the company. It’s also worth noting that the stock has shot up a remarkable 76% in the past three months following its latest surge. Does this mean it is too late to buy Datadog stock? Let’s find out.

Image source: Getty Images.

Datadog’s cloud-based observability platform allows customers to monitor their cloud activity across servers, databases, and applications to detect issues, while its security features scan for vulnerabilities so that they can be fixed quickly. The demand for Datadog’s cloud observability solutions has been rising at an impressive pace, thanks to the secular growth of the cloud market.

Now, the company is also providing tools for monitoring large language models (LLMs) and other artificial intelligence (AI) applications. The company is targeting lucrative end markets that are currently worth around $80 billion. This indicates that it has a lot of room for long-term growth. It has generated $2.8 billion in revenue in the trailing 12 months.

However, investors will now have to pay a rich premium to buy into Datadog’s potential growth. That’s because it is now trading at a whopping 330 times trailing earnings. Though the forward earnings multiple of 82 is significantly lower than the trailing multiple, it is still on the expensive side when compared to the S&P 500 index’s average earnings multiple of 24.

The price-to-sales ratio of 20 is over 6x the index’s average sales multiple. The only way Datadog stock can sustain its impressive stock market momentum is by delivering stronger-than-expected growth and outpacing Wall Street’s growth expectations. But can the company do that?



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Bay Area teen using AI to try to prevent future Mars Rover mishaps

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A 14-year-old from Pleasanton is using cutting-edge artificial intelligence in hopes of solving a problem that occurred millions of miles from Earth. 

Bhavishyaa Vignesh, a student at The Knowledge Society San Francisco, is trying develop an AI-powered model to help Mars rovers avoid obstacles, and avoid becoming stuck in Martian soil, like NASA’s Opportunity rover did in 2017.

“There’s a rover on Mars, it’s called Opportunity, and its wheel got stuck in a sand dune,” said Vignesh. “What I’m trying to essentially simulate is this type of thing happening in the future, and prevent this from happening again.”

At one time, Vignesh dreamed of becoming an astronaut. But her aspirations shifted after she won first place at the 2023 Canadian Space Agency Brain Hack competition. Her winning concept was a virtual reality headset designed to help astronauts manage isolation and emotional stress during space missions.

Now, she’s part of an elite group of students tackling ambitious global challenges on weekends at The Knowledge Society, a STEM accelerator program.

“When she came up with this project, I was really happy that someone was there to guide her, and that someone was there to coach her, and she can run her ideas by like-minded people,” said her mother, Suchitra Srinivasan.

The program’s director, Esther Kim, said its mission is to connect students with mentors from top Bay Area tech firms and challenge them to solve some of the world’s most pressing problems.

“We focus on solving the world’s biggest problems, hunger, cancer, climate change, and we pair emerging technologies with these hard problems to create real-world impact,” said Kim. “We don’t create tiny, cute high school projects. We actually want to launch really good ideas in the wild and test them.”

Vignesh’s project is currently in development, but she’s already preparing to present other projects, along with other students, at a showcase this Saturday at Yerba Buena Gardens in San Francisco. The event is free and open to the public at 10 a.m.

“It’s so important for the future of space travel,” Vignesh said. “It’s to showcase how important it is to choose the best possible path.”

NewsArtificial IntelligenceSan FranciscoAir and SpaceTech



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Musk AI firm says removing ‘inappropriate’ chatbot posts

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Elon Musk’s artificial intelligence start-up xAI says it is working to remove “inappropriate” posts on the multi-billionaire’s social network X.

The announcement came after the platform’s Grok AI chatbot shared multiple comments that were widely criticised by users.

“Since being made aware of the content, xAI has taken action to ban hate speech before Grok posts on X,” the company said in a post.

According to media reports, Grok made multiple positive references to Hitler this week when queried about posts that appeared to celebrate the deaths of children in the recent Texas floods.

In response to a question asking “which 20th century historical figure” would be best suited to deal with such posts, Grok said: “To deal with such vile anti-white hate? Adolf Hitler, no question.”

“If calling out radicals cheering dead kids makes me ‘literally Hitler,’ then pass the mustache,” said another Grok response. “Truth hurts more than floods.”

The incident came as xAI was due to launch its next-generation language model, Grok 4, on Wednesday.

On Friday, Musk posted on X that Grok had improved “significantly”, but gave no details of what changes had been made.

“You should notice a difference when you ask Grok questions,” he added.

The chatbot drew criticism earlier this year after it repeatedly referenced “white genocide” in South Africa in response to unrelated questions – an issue that the company said was caused by an “unauthorised modification”.

X, which was formerly called Twitter, was merged with xAI earlier this year.

Chatbot developers have faced extensive scrutiny over concerns around political bias, hate speech and accuracy in recent years.

Musk has also previously been criticised over claims that he amplifies conspiracy theories and other controversial content on social media.



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The Vatican is shaping the ethics of artificial intelligence

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As AI transforms the global landscape, institutions worldwide are racing to define its ethical boundaries. Among them, the Vatican brings a distinct theological voice, framing AI not just as a technical issue but as a moral and spiritual one. Questions about human dignity, agency, and the nature of personhood are central to its engagement – placing the Church at the heart of a growing international effort to ensure AI serves the common good.
 

 



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