BofA issues buy ratings for Datadog and Atlassian

Infrastructure Software Secures BofA Buy Ratings Ahead of Q3 Reports

BofA Securities designated the infrastructure software sector as an attractive investment ahead of third-quarter earnings reports, according to a report by kr.investing.com. The financial firm projected that infrastructure software will demonstrate higher resilience and stronger artificial intelligence benefits than other software subsectors. Demand across the sector is rising, driven by artificial intelligence contributions to growth and platform usage. Companies proving that artificial intelligence acts as a positive growth catalyst face strong prospects for stock re-ratings, despite holding premium valuations.

DataDog Targets Rapid Market Share Gains in Observability

Datadog is capturing market share faster than competitors within its total addressable market, backed by surging demand for system observability. BofA Securities reported that enterprise artificial intelligence acceleration and consumer agents are driving this faster growth. Total revenue growth estimates sit at 28.7% according to BofA Securities and 29.1% according to market consensus. Security solutions represent an underappreciated business driver, with annual recurring revenue exceeding $100 million in the second quarter of 2025. Security growth accelerated to between the mid-40% and mid-50% range year-over-year. BofA Securities maintained a buy rating while raising its price target to $335.

Atlassian Cloud Revenue Growth

Atlassian shares climbed over 280% from an April low near $57, yet BofA Securities sees further room for re-rating if fundamentals continue to validate long-term artificial intelligence tailwinds. BofA Securities and market consensus project cloud revenue growth rates of 28.5% and 28.9% respectively. The broader market undervalues Atlassian’s repository of 20 years of work context data, which serves as a critical asset for deploying efficient, lower-cost artificial intelligence tools. BofA Securities reaffirmed its buy rating and raised its price target from $210 to $252.

Target Price Adjustments Across Software Equities

BofA Securities adjusted price targets for multiple infrastructure software providers while lowering expectations for PATH. The firm raised targets for AMPL, DT, ESTC, FROG, GTLB, and PD alongside Datadog and Atlassian. Conversely, PATH received a lowered price target amid a more selective evaluation of software subsectors.

Frequently Asked Questions About Infrastructure Software Ratings

What specific metrics did BofA Securities analyze for Datadog?

BofA Securities tracked total revenue growth projections at 28.7% and monitored security solution annual recurring revenue, which crossed $100 million in the second quarter of 2025 with growth between the mid-40% and mid-50% range.

How much have Atlassian shares risen since April?

Atlassian stock climbed more than 280% from its April low of approximately $57.

Which infrastructure software firm received a lower price target?

BofA Securities lowered its price target for PATH while increasing targets for several other sector peers including Datadog, Atlassian, AMPL, DT, ESTC, FROG, GTLB, and PD.