Capitalizing on AI-Driven Nasdaq Gains: Strategic Entry Points in 2026

The Nasdaq's trajectory in 2026 is increasingly tied to the transformative power of artificial intelligence (AI), with investors seeking exposure to companies that are not only adapting to the AI revolution but leading it. Two names stand out in this high-stakes arena: Meta Platforms (META) and Datadog (DDOG). Both have demonstrated robust AI innovation, strong financial performance, and compelling Wall Street backing, making them prime candidates for growth-oriented investors looking to capitalize on the next phase of the AI-driven market boom.

Meta Platforms: Scaling AI Infrastructure for Long-Term Dominance

Meta's 2025 has been defined by aggressive investments in AI infrastructure, with capital expenditures soaring to $70–72 billion-a-clear signal of its commitment to embedding AI across its ecosystem of apps, including Facebook, Instagram, and WhatsApp according to reports. This spending has fueled advancements in generative AI tools, such as Llama 3, and expanded data center capacity to support real-time AI-driven personalization and content moderation.

Financial results underscore Meta's resilience. Despite a one-time $15.93 billion tax charge in Q3 2025, the company reported $51.2 billion in revenue, a 26% year-over-year increase, outpacing Wall Street expectations. However, the stock price dipped post-earnings due to concerns over Reality Labs' persistent operating losses and the heavy capital burden. This reaction, while understandable, may present a short-term dislocation for long-term investors.

Wall Street analysts remain bullish. Rosenblatt Securities has reaffirmed a $1,117 price target for 2026, citing Meta's acquisition of Manus as a "rocket ship growth story" in AI-driven metaverse applications. Cantor Fitzgerald's $920 target reflects optimism about a "sentiment reversal" as AI monetization accelerates according to analysts. Morgan Stanley's analysis suggests Meta's 2026–2027 revenue could outperform consensus by 2–4%, particularly if Q4 2025 guidance aligns with its aggressive AI roadmap. At a current price of $649.90, Meta offers a compelling entry point for investors willing to ride out near-term volatility according to market analysis.

Datadog: The Unsung Hero of AI-Driven Observability

While Meta dominates headlines, Datadog has quietly emerged as a critical enabler of AI innovation. The company's Q3 2025 results highlight its growing relevance: revenue surged 28% year-over-year to $885.65 million, with AI-native customers contributing 12% of total revenue. Products like LLM Observability and Bits AI are addressing a critical pain point for enterprises deploying large language models (LLMs), enabling real-time monitoring and optimization of AI workflows.

Analyst enthusiasm for Datadog is palpable. A consensus price target of $214.67 implies a 57% upside from its current price of $133.77, with some high-end estimates reaching $260-a potential 91% gain according to market reports. This optimism is grounded in Datadog's financial trajectory: projected 21% annual revenue growth through 2027 and EPS forecasts of $2.41 for 2026. The company's ability to monetize AI adoption-67% of customers now use its AI tools-positions it as a beneficiary of the broader AI infrastructure boom according to industry analysis.

Strategic Entry Points: Balancing Risk and Reward

Both Meta and Datadog exemplify the dual dynamics of the AI-driven Nasdaq: established leaders scaling infrastructure and niche innovators solving specific technical challenges. For growth investors, the key lies in identifying undervalued entry points amid market skepticism.

Meta's stock dip following Q3 earnings, despite record revenue, reflects short-term concerns about capital intensity and metaverse losses. Yet its AI investments are already yielding tangible results, and analyst price targets suggest a 40–70% upside by 2026. Similarly, Datadog's current valuation appears modest relative to its role in enabling enterprise AI adoption, with consensus targets implying a 57–62% upside according to Nasdaq reports.

Conclusion: Positioning for AI's Next Wave

The Nasdaq's 2026 gains will hinge on companies that can bridge the gap between AI hype and practical, scalable solutions. Meta and Datadog are not just beneficiaries of the AI trend-they are architects of its infrastructure and applications. With strong Wall Street backing, clear revenue growth, and AI-driven innovation, both stocks offer strategic entry points for investors seeking to capitalize on the next phase of the AI revolution.