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Datadog shares rise 7.7% after analysts lift price targets
The jump follows multiple upward target changes, with first-quarter revenue up 32% year over year to over $1 billion as AI-native customers increasingly drive growth ahead of an Aug. 6 earnings report.
Datadog shares rose 7.7% after several analysts increased their price targets, according to Yahoo Finance. Analysts at Morgan Stanley, BTIG, and Citi raised their targets to $300, $289, and $300, respectively, citing changes of 11% to 33%, while keeping bullish ratings.
Yahoo Finance said the key focus for investors going into Datadog's Aug. 6 earnings report is not the price target revisions themselves, but what is driving growth. In the first quarter, Datadog reported revenue of more than $1 billion, up 32% year over year, and total annualized revenue run-rate (ARR) exceeding $4 billion.
The outlet also highlighted customer mix, noting that the number of customers spending at least $100,000 annually increased 21% to about 4,550. Datadog’s non-AI-native customers grew in the mid-20% range, with incremental growth largely attributed to AI clients, including five AI-native customers contributing over $10 million in ARR.
Yahoo Finance added that the company has shifted from standard software monitoring toward a usage-based model tied to AI computing infrastructure. It also pointed to valuation and risk factors, citing trading around 106 times forward earnings and 25 times sales, along with concentration concerns and the modest level of short interest at 3.86%.