Growth stocks have had an up-and-down year so far. Despite bullish projections heading into 2025, President Donald Trump’s global trade reset has weighed on markets, with the benchmark S&P 500 close to flat year to date, despite a recent marketwide trend reversal.
However, savvy investors know that marketwide pullbacks are often the best times to load up on high-quality names. With that in mind, here is a nuts-and-bolts overview of two currently unloved growth stocks that appear ripe to deliver stronger performances from here.
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Cloud observability powerhouse
Datadog (DDOG 2.80%) is a cloud observability platform that helps companies monitor and optimize their entire technology infrastructure. Think of its software as a control tower for modern businesses, providing real-time visibility into servers, databases, applications, and services across cloud environments. When something goes wrong in a company’s digital operations, Datadog helps teams quickly identify and resolve the issue before it affects customers.
The company has become an essential service provider for many enterprises navigating their digital transformations. Over 30,500 customers now rely on Datadog’s platform, and the business is thriving. In the first quarter, revenue surged 25% year over year to $762 million, beating analysts’ consensus expectation. Though the stock has lost 7.4% of its value over the past 12 months, the underlying business momentum remains remarkably strong.
What makes Datadog particularly compelling is its rapidly expanding opportunity in artificial intelligence (AI) observability and data quality monitoring. With the increasing adoption of AI, companies will need more sophisticated tools to monitor AI-generated code and workloads. Datadog’s AI-native customer cohort already represents 8.5% of its annual recurring revenue, up from just 3.5% a year ago, and this segment is growing quickly.
Still, Datadog stock isn’t cheap. Currently, the cloud observability specialist’s shares trade at a whopping 60 times forward earnings. For comparison, the S&P 500 presently trades at around 21 times forward earnings. However, with top-line growth expected to approach 40% throughout 2025 and 2026, per Wall Street’s consensus estimates, Datadog’s premium valuation isn’t surprising. After all, the company is evolving into a cornerstone of the broader AI revolution — and that megatrend is an unstoppable force that’s expected to generate trillions in economic value in the years ahead.
Nuclear energy renaissance play
Uranium Energy (UEC 1.78%) (aka UEC) is a uranium mining company with three hub-and-spoke platforms in southern Texas and Wyoming. The company extracts uranium using in-situ recovery (ISR), a low-cost method that uses chemicals to dissolve the uranium underground; the resulting solution is then pumped to the surface, where the minerals are extracted from it. As the U.S. moves to secure its nuclear fuel supply chain, UEC is positioned to become a critical domestic supplier.
The investment case for Uranium Energy is centered on the surging electricity demand from the nation’s growing numbers of AI data centers, which require reliable baseload power that renewables can’t consistently provide without battery storage solutions. This situation is driving a nuclear renaissance, with tech giants like Microsoft and Alphabet signing deals with utilities to restart shuttered nuclear reactors and build new ones.
Recent policy developments have supercharged UEC’s prospects — President Trump’s executive orders invoked the Defense Production Act to reduce U.S. dependence on foreign uranium and streamline nuclear reactor construction. Though Uranium Energy’s shares are down by about 11.2% over the past 12 months, the company’s strategic importance has never been clearer.
The main concern for investors here will be valuation. UEC stock trades at 178 times expected forward earnings, a massive premium to the S&P 500’s 21 multiple.
However, with U.S. power consumption expected to hit record highs in 2025 and 2026, and with domestic uranium production still far below demand, UEC’s scarcity value may not only justify that price but drive a significant rally in the months ahead. As one of the few production-ready domestic uranium suppliers, UEC stands to benefit directly from America’s nuclear resurgence. That’s a potent catalyst.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. George Budwell has positions in Microsoft. The Motley Fool has positions in and recommends Alphabet, Datadog, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
