Key Stats for DDOG Stock
- Price Change for DDOG stock: +13.74%
- DDOG Share Price as of Feb. 10: $129.67
- 52-Week High: $201.69
- DDOG Stock Price Target: $188.35
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What Happened?
Datadog (DDOG) stock jumped over 15% yesterday after the company announced fourth-quarter results that beat expectations, with revenue reaching $953 million, which represented a 29% increase year-over-year and exceeded analyst estimates by a significant margin.
Datadog also guided for FY2026 revenue between $4.06 billion and $4.10 billion, implying 18-20% growth overall, but the Q1 revenue guidance of $951 million to $961 million was particularly upbeat and contributed to the market enthusiasm.
The results highlighted ongoing strength in AI and cloud migration demand because enterprises continued to adopt Datadog’s platform to manage complex digital environments effectively.
Datadog operates an observability and security platform for cloud applications, and it offers a wide range of products, including infrastructure monitoring, log management, and cloud security management to support modern IT operations.
Customer growth fueled the earnings beat, because the number of customers with $1 million or more in annual recurring revenue reached 603, marking a 31% increase from the previous year, and those with $100,000 or more grew 19% to 4,310.
Full-year 2025 revenue hit $3.43 billion, up 28% from the prior year, and this performance was supported by record bookings of $1.63 billion, which rose 37% year-over-year.
Management highlighted product innovation during the earnings call, noting that over 400 new features were delivered in 2025, and partnerships such as the expanded deal with Google Cloud helped boost AI and machine learning observability capabilities.
The surge in stock price reflects broad enthusiasm for Datadog’s pivotal role in digital transformation, because the company signed 18 deals over $10 million in total contract value during the quarter, including two exceeding $100 million and one eight-figure land with a leading AI model company.
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What the Market Is Telling Us About DDOG Stock
The strong rally in DDOG stock signals that investors are optimistic about the company’s growth trajectory, and the earnings beat adds significant credibility to the long-term thesis, so sophisticated institutional investors continue to show confidence in its strategy.
Datadog reported fourth-quarter revenue of $953 million and adjusted EPS of $0.59, but it also achieved a non-GAAP gross margin of 81.4% and operating income of $230 million, representing a 24% margin that underscores operational efficiency.
The company outperformed expectations in its observability and security segments during the quarter, because demand for unified solutions remained robust amid increasingly complex cloud environments.
Management remains confident about organic growth prospects because AI adoption continues to drive higher demand for advanced monitoring tools, and the Bits AI SRE agent has already gone into general availability with over 2,000 trial and paying users.
Datadog’s AI-powered platform could improve margins across its product suite because features like AI observability now serve over 1,000 customers, and international expansion supports revenue diversification while cost optimization efforts aid overall profitability.
However, DDOG faces execution risk as it scales new features rapidly, so integrating advanced AI tools successfully requires strong operational discipline, and competition from established peers remains intense in the observability space.
Overall, the market sees Datadog well-positioned for AI-driven observability needs, because core business revenue growth excluding AI natives accelerated to 23% year-over-year from 20% in the prior quarter, signaling broadening adoption across diverse customer segments.
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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!
