A Look at Dynatrace (DT) Valuation Following Major Microsoft and Amazon AI Cloud Integrations

Dynatrace (NYSE:DT) has just unveiled a string of integrations and enhancements with leading cloud platforms, including Microsoft Azure SRE Agent and Amazon Bedrock AgentCore. These moves expand the company’s AI-driven visibility and automation tools for enterprise clients.

See our latest analysis for Dynatrace.

These headline integrations with Microsoft and Amazon come on the heels of a turbulent year for Dynatrace’s stock. Despite continuous innovation and high-profile cloud partnerships, the 1-year total shareholder return has slipped to -17.2%. More recently, the share price has lost momentum, with a 30-day return of -14.7% and a year-to-date return of -20.1%. This suggests investors remain cautious even as the company extends its market leadership in AI observability. Over the long term, however, Dynatrace still boasts a positive three-year total shareholder return of 17.8%, which may hint at resilience if growth accelerates again.

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With so many innovation milestones and a widening lead in AI observability, the real question remains: does Dynatrace’s current valuation understate its future potential, or has the market already priced in the next wave of growth?

Most Popular Narrative: 29.7% Undervalued

With the most widely followed narrative assigning a fair value that sits well above the last close of $43.44, Dynatrace is depicted as meaningfully undervalued by the analysts. The stage is set for a bold outlook grounded in AI-powered growth and deepening customer relationships.

Dynatrace is well positioned to capture incremental share of the expanding addressable market created by enterprises accelerating digital transformation and cloud modernization initiatives, as evidenced by multi-million dollar, end-to-end observability deals and a pipeline heavily weighted toward large, strategic consolidations. This is expected to catalyze sustained revenue growth and increased average ARR per customer over time.

Read the complete narrative.

Curious why this narrative’s target is so high? The story hinges on ambitious growth forecasts, industry-leading margins, and a future profit multiple few software firms attain. Want to see the underlying projections and what could propel the next surge? Dig in to unravel the engine behind this bold fair value call.

Result: Fair Value of $61.79 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition from hyperscalers and delays in closing large enterprise deals could challenge Dynatrace’s projected growth and put pressure on profitability in the near term.

Find out about the key risks to this Dynatrace narrative.

Build Your Own Dynatrace Narrative

If you see things differently or want your own analysis to guide the story, it only takes a few minutes to build a perspective from scratch. Do it your way

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Dynatrace.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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