Key Stats for Datadog Stock
- Price change for Datadog stock in last 6 months: 104%
- $DDOG Stock Price as of Oct. 19: $260
- 52-Week High: $301
- $DDOG Stock Price Target: $290
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What Happened?
Bernstein upgraded Datadog (DDOG) to Outperform from Market-Perform on Monday and raised its price target to $350 from $237, , Investing.com reports.
Analyst Peter Weed said demand from AI-native customers is far stronger than he expected and said “our imagination failed us.”
His data points to enterprise token use growing at least 50% from the prior quarter among the largest AI labs. It may be growing even faster at smaller “Born in AI” firms.
Bernstein had downgraded Datadog ahead of last quarter and was worried about a roughly $100 million ARR cut by Datadog’s largest “Born in AI” customer, which Bernstein believes is OpenAI.
It also worried about weak traditional customers, who make up about 85% of revenue.
Weed said traditional customer signals ended the Q3 even weaker than expected, but the AI picture improved sharply.
Bernstein raised its near-term revenue growth view by about 7 percentage points and extended how long it expects that growth to last.
Rising use of AI agents by consumers could lift usage at internet and commerce customers. Datadog’s SRE AI agent also looks well timed for teams handling a flood of AI-written code.
Datadog stock has real results behind the upgrade. Revenue grew 36% to $1.12 billion, above the top of guidance and quarterly revenue added was a record $115 million.
The company also said non-AI customer growth sped up again, to the high 20s percent, up from the mid-20s last quarter and 18% a year ago.
Management said AI customers are growing faster still.
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What the Market Is Telling Us About Datadog Stock
For Datadog stock, the upgrade is a bet that AI demand keeps building. It also shows how quickly views can shift.
The risk from the largest customer is still real. On the call, Datadog said that customer cut usage starting in Q3, and it built that into guidance. It also renewed the contract.
Management said growth excluding that customer is about the same as the rest of the business.
Weed also said traditional demand looks weaker, which could affect the next results.
Datadog stock may stay volatile as these two forces compete.
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So what is Datadog stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
