DA Davidson Reaffirms Buy on Dynatrace (DT) After Solid Q3
Dynatrace Inc. (NYSE:DT) is among the best machine learning stocks to buy according to analysts. Following the company’s Q3 2026 results (FY ends in March), DA Davidson analyst Gil Luria cut DT’s price target from $65 to $50 but reaffirmed his Buy rating, according to a February 10 report by The Fly. The analyst said the company’s quarterly results were strong and that, due to end-to-end observability deals, it reported better-than-expected net new annual recurring revenue (ARR).
Luria also appeared impressed by Dynatrace Inc.’s (NYSE:DT) log management product and go-to-market changes, which, in his view, are not only helping the company gain market share but also driving strong pipeline growth.
On February 9, Dynatrace Inc. (NYSE:DT) reported an 18% growth in its Q3 revenue of $515 million, driven by $493 million (+18% year over year) in Subscription revenue. While total ARR grew 20% to $1.97 billion, the adjusted EPS came in at $0.44, ahead of the consensus at $0.41. Encouragingly, the company’s execution remains strong: it closed 12 deals exceeding $1 million in ARR in the quarter and announced a new $1 billion share repurchase program after nearly completing its earlier $500 million program.
On the results, Rick McConnell, CEO of Dynatrace, highlighted the company’s increasing traction with enterprises and stated:
Our third quarter results surpassed the high end of our guidance across all top-line growth and profitability metrics. Notably, we’ve generated double-digit net new ARR growth for three consecutive quarters, which reflects the growing number of enterprises adopting Dynatrace as their end-to-end observability platform.
Dynatrace Inc. (NYSE:DT) is a U.S.-based software company that provides AI-powered observability, application performance monitoring, and security solutions. The company employs machine learning to automatically monitor applications, networks, and cloud systems.
While we acknowledge the potential of DT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 12 Best Software Infrastructure Stocks to Buy According to Hedge Funds and Cathie Wood’s Stock Portfolio: Top 10 Stocks to Buy.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Cerebras (CBRS.US) Cloud Business Soars, Masking Hardware Decline; OpenAI Supports Half of Cloud Revenue
Cerebras achieved record Q3 revenue, but hardware income dropped by nearly 30%, while cloud business accounted for two-thirds of total revenue. OpenAI contributed $72.4 million. The company raised its full-year guidance and expects Q4 to be close to breakeven.
Microsoft (MSFT.US) offers voluntary buyout packages to about 60,000 employees: Structural divergence in U.S. employment under AI transformation
In 2026, the U.S. labor market is characterized by both low layoffs and weak hiring. Companies like Microsoft and American Express are leveraging AI to optimize their workforce, while data centers are driving growth in the construction sector. However, entry-level white-collar jobs face increasing pressure, with real wages experiencing negative growth and structural transformation risks becoming more prominent.
"Inflation is really too high"! Federal Reserve "third-in-command": The Fed must continue to take action and promptly bring the price level back to 2%
John Williams, President of the New York Federal Reserve and the “number three” official at the Federal Reserve with a permanent voting right, stated that U.S. inflation remains high and policymakers must take further action to curb price pressures.
Jensen Huang steps down, and the "biggest patron" of new AI players is gone too
Anthropic's tens-of-billions IPO investment, Figure AI's additional $1 billion, and Nscale's over $5 billion credit guarantee are all in negotiations but their outcomes remain uncertain. Meanwhile, its $500 billion AI financing platform has stalled, and some clients are considering switching to AMD or Google. Successor Kress has a conservative style and has repeatedly vetoed deals aggressively promoted by Jensen Huang, signaling the possible end of Nvidia's era of bold investments.
Crypto prices
More
