Key Stats for Datadog Stock
- Current Price: $277.22
- Target Price (Mid): ~$730
- Street Target: ~$287
- Potential Total Return: ~162%
- Annualized IRR: ~26% / year
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free) >>>
What Happened?
Datadog (DDOG) closed at $277.22 on October 2, 2026, and its chief financial officer has an unusual message for customers: send Datadog less data. At Goldman Sachs’ Communacopia + Technology Conference on September 10, CFO David Obstler argued that cutting data customers do not need helps retention and margins.
Datadog Is Telling Customers They Send It Too Much Data
Two products lead the effort. Infinite Cardinality Metrics sorts custom metrics before Datadog processes them. Federated Logs let customers query logs stored in ClickHouse or Databricks without moving them into Datadog.
“We actually go to clients and we say, you know, you set this wrong. You’re flowing too much data into Datadog that you don’t need for this purpose,” Obstler said. He said converting customers to Infinite Cardinality “has essentially been retentive and also margin enhancing.” He added that storing log data that is never used is a burden on Datadog’s system.
The trade-off is real: some log budget can move to ClickHouse or Databricks, a point the moderator raised directly. Obstler answered that customers who centralize on Datadog bring higher average revenue per customer. In his view, keeping them on the platform beats forcing every log through it.
The numbers have held so far. In each of the five quarters from Q2 2025 to Q2 2026, revenue topped the high end of management’s own guidance by 3.8% to 4.7%.
See historical and forward estimates for Datadog stock (It’s free!) >>>
Proprietary Models and Coding Agents Could Cut Costs
Datadog first built its AI features on outside foundation models. Obstler said it is starting to invest in proprietary models built on its own observability data, which he expects to shift token costs toward those models. The June 30 purchase of reinforcement learning startup Adaptive ML feeds that research lab. “Early on, it takes investment, it takes lift to do that,” he said.
Engineering is being tested too. Obstler said Datadog runs A/B teams with more and less access to coding tools. He said it is “starting to see signs of real efficiency in terms of using coding agents to improve the velocity,” though he added it is still early. He also noted that Datadog has consistently put 30% of revenue into R&D, over $1 billion.
The Valuation Already Assumes the Margin Gains
TIKR’s estimates have the adjusted EBIT margin rising from 22.4% in 2025 to around 25% in 2028. They have the free cash flow margin rising from 26.7% to around 29%. Investors are paying for that path at around 105x NTM P/E, versus around 29x for Dynatrace (DT). Consensus also expects third-quarter revenue growth to slow to around 29%, from 35.64% in the second quarter.
See how Datadog performs against its peers in TIKR (It’s free!) >>>
TIKR Advanced Model Analysis
- Current Price: $277.22
- Target Price (Mid): ~$730
- Potential Total Return: ~162%
- Annualized IRR: ~26% / year
See analysts’ growth forecasts and price targets for Datadog stock (It’s free!) >>>
The TIKR model’s mid-case values Datadog at around $730 by December 31, 2030. That is a total return of around 162%, or around 26% a year over 4.2 years. It is the only scenario the model card prices at that date.
Its mid-case assumptions, set over the model’s full forecast period, use around 21% annual revenue growth and a net margin near 29%, versus 27.7% revenue growth in 2025. AI-native workloads and enterprise cloud migration carry the growth, while the data, model, and coding shifts carry the margin.
The main risk is concentration, after Datadog disclosed lower usage from its largest customer in August. On the upside, consensus revenue of around $6.76 billion for 2028 implies roughly 25% annual growth from 2025, above the model’s long-run input. On the downside, the stock fell as much as 48.62% from its peak before bottoming on February 23, 2026.
Conclusion
Datadog’s third-quarter report, which came on November 6 last year, is the first test. Management guided revenue to $1.135 billion to $1.145 billion, and consensus sits within $1 million of the top. Another beat of about 4% over the high end would put revenue near $1.19 billion. A print close to $1.145 billion would be the first quarter in that stretch without a cushion.
See what stocks billionaire investors are buying so you can follow the smart money with TIKR.
So what is Datadog stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Datadog could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Analyze Datadog on TIKR Free →
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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!
