May was a big month for the technology sector. The Technology Select Sector SPDR Fund (NYSEARCA: XLK), a commonly used proxy for the industry’s performance, delivered a total return of 19.8%. This was barely below the 20% gain the fund put up in April, as investors strongly bid up many stocks within the AI trade.
Three stocks did particularly well and received high praise from the analyst community—topping MarketBeat’s list of the most upgraded stocks in May. Unsurprisingly, all three are in the tech sector, including two prominent software companies.
Datadog Blasts off, Receiving Over 30 Upgrades in May
Observability software provider Datadog (NASDAQ: DDOG) ties for first as MarketBeat’s most upgraded stock in May, receiving a whopping 32 upgrades from analysts. Datadog’s software is becoming increasingly important as agentic AI starts to move into the mainstream. It helps companies monitor their AI agents and address issues with their performance.
Datadog shares absolutely exploded after the company’s Q1 2026 earnings report, shooting up by 31% in a single session.
This came as the firm handily beat expectations on sales and adjusted earnings per share (EPS) and substantially increased its guidance for the full year. It now expects to generate full-year sales of between $4.32 billion at the midpoint, which represents growth of around 25% year-over-year (YOY).
Datadog also received FedRAMP High certification, which allows it to move forward with U.S. federal government customers that handle highly sensitive workloads. Overall, Datadog shares rose 87.1% in May, the stock’s best monthly return ever.
Despite receiving a plethora of upgrades, the MarketBeat consensus price target of approximately $220 implies around 20% downside in shares. The average of targets updated after its report is only slightly higher at $225. However, the vast majority of analysts continue to have a Buy rating on the stock. Datadog’s 41 Buy ratings stand in stark contrast to its just two Sell ratings and one Hold rating.
Marvell Continues Strong Performance From April, Ups Guidance
Marvell Technology (NASDAQ: MRVL) was also a huge winner in May, and tied with Datadog for the top spot, receiving 32 analyst upgrades. Overall, shares gained by 24% in May after coming off of a 67% gain in April. There wasn’t a specific catalyst in May that allowed for Marvell’s strong performance. Rather, the stock really benefited from strength in the AI hardware trade, being a supplier of custom chips and networking solutions.
Marvell’s Q1 fiscal 2027 (FY2027) earnings report in late May saw the firm post a slight beat on sales and in-line adjusted earnings per share (EPS). Note that the firm’s fiscal reporting period is several quarters ahead of the calendar period. However, the company raised its guidance substantially, by $500 million for FY2027 and by $1.5 billion in FY2028. It expects sales of $11.5 billion and $16.5 billion in these years, respectively.
Notably, shares rose by just 3% after this report. Investors seemed to have anticipated the strong guidance Marvell would post, bidding up shares earlier in the month.
The MarketBeat consensus price target on Marvell sits near $212, implying a notable downside in shares. The average of targets updated after the company’s report is substantially higher at $236—better, but still implying downside, a reflection of the recent surge in shares following an announcement from NVIDIA (NASDAQ: NVDA) CEO Jensen Huang that thrust Marvell into the spotlight. In terms of ratings, Marvell has 31 Buys, six Holds, and zero Sells.
Snowflake Ends May With a 36% Surge, Gains Over 80% in the Month
Last up is Snowflake (NYSE: SNOW)—another key player in the AI software space. The stock received 28 upgrades in May, shooting up 87% during the month, good for its largest monthly gain ever. The company’s AI Data Cloud provides a unified platform for analyzing data and building AI applications. Like Datadog, there was a clear catalyst for Snowflake’s hallmark performance: its Q1 FY2027 earnings report. (Snowflake’s fiscal reporting period is several quarters ahead of the calendar year period.)
The stock gained almost 37% after the report as Snowflake posted beats on sales and adjusted EPS. The company also raised its full-year guidance, projecting sales of $5.84 billion, compared to its prior estimate of $5.66 billion. Furthermore, Snowflake allocated $6 billion to Amazon.com (NASDAQ: AMZN) to access more of its Graviton chips. This signals confidence in the firm’s outlook as Snowflake supports its growth through this significant spending commitment.
The MarketBeat consensus price target on Snowflake currently sits at $284, implying moderate upside from recent trading levels. The average of targets updated after the company’s report sits near $291, implying healthy upside. Still, most analysts maintain a positive rating on the stock, with Snowflake having 36 Buys compared to just five Holds and one Sell.
AI Software Stocks Make Their Voice Heard in May
Notably, large gains in the AI trade were not limited to the hardware stocks that have traditionally dominated. Several software players saw very strong performance as well, rebounding after many names in this industry were crushed earlier in the year. This signals that AI-related success is broadening as AI application building becomes a larger focus in the market.
The article "3 Most Upgraded Stocks Last Month According to MarketBeat" first appeared on MarketBeat.
