Aug. 26 at 1:35 AM
Morgan Stanley upgraded Dynatrace to Overweight from Equal Weight, raising its price target to
$65 from
$58, implying about 32% upside from its Aug. 24 close. The firm cited improving demand for observability software, a major customer-renewal cycle and stronger AI capabilities, with the market seeing its healthiest demand since 2022.
Morgan Stanley expects Dynatrace’s net new ARR growth to exceed 20% again in fiscal 2027, with ARR growth above 20% in fiscal 2028 and 2029. About 70% of a renewal cohort that is 50% larger than last year is expected in the second half of fiscal 2027, potentially driving higher customer commitments.
The broker also highlighted Dynatrace’s expansion into AI observability and autonomous operations, including its Arize acquisition. More than 800 customers were already using its agentic capabilities in fiscal Q1 2027, up from about 500 previously.
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