Two Stocks Markets are Already Buying in Q3

July 5, 2026

Apple stock chart showing key levels of support and resistance

Apple (AAPL)

A couple years ago, at the very start of the AI rally, Apple became the “bad apple” of the Magnificent 7 because of they didn’t commit hundreds of billions towards the AI buildout like other large cap tech. The tables seem to be turning 24 months later as investors rethink the cost and timeline to materialize actual returns from the AI buildout spending / CapEx other companies have deployed.

Apple vs Everybody

While Microsoft, Google, Amazon, and Meta raced to build the infrastructure behind AI, Apple took a different route…owning the device layer where consumers actually experience AI. AI gets all the attention, but it’s only as powerful as the interface people use to interact with it. Apple controls that interface through the iPhone, Mac, iPad, Watch, AirPods, and its broader ecosystem.

That ecosystem is Apple’s biggest advantage. Once someone owns multiple Apple products, they become tied into a system that is hard to leave. That allows Apple to monetize users beyond the initial device sale through iCloud, App Store purchases, Apple Music, Apple TV, AppleCare, Apple Pay, and more.

The Upgrade Super Cycle

For the first time in years, the iPhone upgrade story is not just about a better camera or tougher screen. AI could become the reason people upgrade. Older hardware may not be powerful enough to run advanced on device AI efficiently, which makes Apple’s next generation of chips even more important.

Apple Intelligence 2.0

Apple Intelligence is still early, but this is likely going to become one of the biggest buzzwords around the company over the next few years. Apple wants Siri to become more than a basic voice assistant (like Jarvis of Iron Man). The goal is a personal AI layer that understands your apps, your messages, your calendar, your notes, your photos, your emails, and your daily routines.

Google may have better search data. Microsoft may have enterprise data. Meta may have social data. Amazon may have commerce data. But Apple owns the personal device layer. It has access to the phone, watch, laptop, tablet, messages, photos, health data, and app ecosystem, while also marketing itself as the privacy focused alternative.

Investors are also watching Apple’s Mac, iPad, and wearables lineup. The Mac has already benefited from Apple silicon, and newer chips are being built to handle more complex workloads, including AI-related tasks….this could experience its own super cycle.

Summary

Apple is one of those stocks to own, not constantly jump in and out of…we covered it and took a position in April through our Hyper Wealth channel, intending to capitalize on the super cycle…and so far it has worked well. Last week, we saw buyers step in strong on the dip…highlighting the “quick” interest in Apple at a lower price.

The risk is execution. Apple Intelligence is still early, Siri has disappointed before, and investors are going to want proof that AI can actually drive upgrades across iPhone, Mac, iPad, and wearables. There’s also the risk that rising component costs, especially memory, weigh on margins if Apple has to pack more power into its devices.

Datadog stock chart showing key levels of support and resistance

Datadog (DDOG)

Price target: Members Only

High risk high reward

There’s a bullish case building around Datadog, and it’s not just because the stock has been ripping. It’s because the original fear around software, that AI agents would “kill” SaaS companies, is starting to look more selective than broad based. The weakest SaaS names may still get disrupted, especially those with simple tools that can be replaced by newer AI native products, but infrastructure software is a different story. Datadog is not really an “AI will replace this” software story. It’s more of an “AI makes this more necessary” infrastructure story.

As companies deploy more cloud workloads, AI applications, agents, APIs, databases, GPUs, and security layers, the tech stack gets harder to monitor. More complexity means more things can break, slow down, cost too much, or create security risks. Datadog gives enterprises one platform to monitor what is happening across their infrastructure and helps teams understand what needs to be fixed.

Brief Financial Overview

Datadog is now showing stronger revenue growth again, better enterprise traction, and strong free cash flow. Q1 free cash flow came in at $289 million, while non-GAAP operating margin was 22%. That gives the company a better mix of growth and profitability than many high growth software names.

The issue is that the stock has already priced in a lot of good news. DDOG’s valuation is still extremely rich, so the setup here is not “cheap stock with upside.” It’s more like “premium stock with momentum, AI tailwinds, and improving fundamentals.” For this reason, we’re treating this with our “gap up and go” strategy, meaning we’d only hold the set-up if it maintains the earnings gap up shown on the chart above.

Overall, DDOG remains one of the stronger software names to watch, especially if money keeps rotating back into cloud and observability stocks. This could be a momentum leader with strong fundamentals, but not one where risk disappeared. The stock has earned a higher valuation, but now it has to keep defending it.

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Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.

Hyper Stocks and its contributors may hold positions in some of the securities or assets mentioned above. These positions are subject to change without notice. Any opinions expressed reflect current views at the time of writing and are not guarantees of future performance. Past performance does not guarantee future results.