AI-led workload growth, resilient enterprise demand, and cross-sell can sustain roughly 30% growth and create upside to expectations.
High expectations leave limited room for execution slips as traditional demand softens, AI customer concentration persists, and valuation remains demanding.
The stock bounced back admirably after an initial dip in sympathy with DT's negative print, ahead of its own earnings report.
Bernstein argues that the recent selloff was unwarranted, seeing AI-native/Workers momentum offsetting Q4 cloud softness, with early Q4 web metrics already rebounding.
For DDOG, its “Born in AI” cohort may have added over $200M ARR this quarter, supporting approximately 40% year-over-year Q4 growth even if traditional customers slow.
Bernstein's model implies roughly $90M of upside versus guidance if the strength lands between Q3/Q4.
Evercore raises its price target to $300 from $280 after checks showed demand at or above plan, continued migrations from competitors, bigger deals, and broadening AI Observability/Bits AI/MCP attach.
Evercore sees F3Q revenue at approximately 33–34% year-over-year, with only about 3.4% upside needed to reaccelerate, and 4Q also looks strong.
Initial FY27 guidance could land approximately 24–26% versus Street's approximately 22%, with historical conservatism leaving room to walk toward 30–36%, even the low end is approximately 4% above Street.
Some large AI natives are moving logs/LLM workloads to cheaper stacks, which could impact future growth.
Bernstein argues Friday’s selloff overread AWS/TWLO weakness and seasonal/token-usage headwinds, with early Q4 web metrics already rebounding. For DDOG, its “Born
Oppenheimer expects a ~4% 3Q revenue beat, with strong year-over-year growth and Net Revenue Retention holding above 120% due to strong enterprise and large-customer momentum.
Checks indicate accelerating software development and AI adoption, with new products broadening the company's AI opportunity beyond its largest customers.
A high percentage of customers use multiple products, leaving further cross-sell runway.
Security, Flex Logs, federal, and international segments add additional levers for FY27.
A large-customer survey shows steady share gains and most respondents expecting continued spend growth, indicating a healthy demand setup.
AI initiatives and agentic coding tools are becoming a meaningful incremental tailwind, increasing observability spend for a large majority of customers.
Overall spending intentions improved slightly quarter-over-quarter, supporting a healthy demand setup into year-end.
A reported nearly $4B bid for Upwind was disputed by another source, creating uncertainty.
The stock declined after reports that the company offered nearly $4 billion for cloud-security startup Upwind, which has not accepted and is closing a $300 million round at a $3.8 billion valuation, implying little premium.
DDOG: MS sees ~33–34% 3Q growth and path to ~30% ex-largest-customer growth into 2027
Consumption trends for the company were stronger throughout the day, likely benefiting from the general outperformance in AI.
Consumption stronger all day though didn’t hear any great reasons why other than the AI outperformance in general: DDOG +6.5%; MDB +6.7% with SNOW +98bps leading the rear. Didn’t hear much on the SNOW weakness: ISI was positive on CoCo checks, but also said...
AI-native demand is reaccelerating significantly, driven by model launches and price cuts, which offsets weakness in traditional customer segments.
DDOG +4% on a Bernstein upgrade; META +40bps lagging on mixed MS/3p notes ahead of earnings on Wednesday; AMZN +2.4% as MS makes it a top pick.
Bernstein reverses its prior downgrade after data shows token consumption at DDOG’s largest AI-lab customers reaccelerating to at least ~50% q/q, helped by Codex/model launches and aggressive price cuts, making its prior 2027 AI-growth slowdown assumptions...
Token consumption at its largest AI-lab customers is reaccelerating to at least 50% quarter-over-quarter, which is expected to boost near-term revenue growth by approximately 7 points.
The Q3 guidance has already accounted for the largest customer's usage cut, suggesting that the near-term negative impact has been absorbed.
Traditional customer segments remain weak and the downsizing of a major AI-lab customer's ARR remains a headwind.
The approximately $100M ARR downsizing from OpenAI is still impacting the company's financials.
Core growth, excluding AI natives, accelerated to high-20s in 2Q26, and over 750 AI-native customers position the company well for agentic observability.
The largest customer is expected to reduce usage from Q3, creating a 2027 concentration/optimization overhang.
The valuation of approximately 19x CY27 revenue leaves less attractive risk/reward.
UBS sees ~$40–50M of Arize net-new ARR in FY28, with the bigger upside from cross-selling into DT’s installed base; DDOG should also benefit as the opportunity looks largely incremental rather than share-shifting.
Wolfe raised its price target to $340, believing that agentic AI and Meta's Muse could significantly increase observability demand, as every tool call, retry, and handoff requires tracing, which costs roughly twice as much as metrics.
AI coding tools are accelerating software development velocity by 2-3x, leading to more code, services, and pipelines for Datadog to monitor.
Wolfe's initial conversations suggest an increasing likelihood of Datadog becoming directly involved with Meta's Muse, further boosting demand.
Wolfe's upside case implies a 32% FY25–28 revenue CAGR, surpassing the 25.5% consensus, positioning Datadog as a prime beneficiary of inference and agentic demand.
DDOG +1.5% as Wolfe says checks show increasing likelihood of being involved with META’s Muse.
The company showed strength in cloud consumption.
Truist reinforced that the company's guidance remains conservative regarding its largest AI-native customer, with Q4 assumptions based on contractual minimum usage, even though Q3 is tracking above that floor, suggesting potential for upside.
Accelerating consumption from OpenAI and Anthropic is expected to cushion Datadog against softness in non-AI cloud demand.
Citi says GTM execution is improving into an FY27 renewal base up ~50% y/y, with Logs, strategic accounts and AI monetization still offering incremental upside largely absent from guidance. Citi sees Arize accelerating DT’s AI observability roadmap by ~18 m...
AMZN/DDOG: Bernstein sees Q4 non-AI cloud softness worsening, but AI demand could offset the headwind
additional ~100bps headwind versus current estimates as traditional workloads weaken. Bernstein says accelerating OpenAI/Anthropic consumption should cushion AWS and DDOG, while lower-AI-exposure usage names such as TWLO and NET look more vulnerable.
Wedbush assumed an Outperform rating and raised its price target to $275 from $260, citing the company's accelerating growth, strong margins, and leadership in AI-native observability.
Observability demand is expected to strengthen as AI infrastructure and applications increase system complexity and monitoring requirements.
Software: DDOG 9:30am (CFO) · RBRK 9:30am (CEO) · U 9:30am (CFO) · INTU 10:10am (CFO) · MDB 10:10am (CEO/CFO/CPO) · Capgemini 10:10am (CEO) · SpaceXAI 12:25pm (CFO) · CRWD 1:45pm (CEO) · SHOP 2:25pm (CFO/VP Product & Growth) · AUR 2:25pm (CEO) · SAIL 3:05pm...
The company is seeing strong renewal and growth from its largest customers and is expanding its platform utility through new data-sharing capabilities.
CEO Olivier Pomel likened the AI transition to the cloud migration that built the company, but on a larger scale, indicating a significant growth opportunity.
The acceleration to 36% growth is broad-based, with non-AI customers moving from approximately 18% growth a year ago to the high 20s, demonstrating widespread strength.
The CEO claimed that the last three months completely disrupted security tooling, rendering older solutions obsolete and eliminating incumbency as an advantage, which could benefit Datadog's newer offerings.
Digital experience was highlighted as a fourth pillar and a potential next-billion-dollar candidate, indicating new avenues for significant revenue growth.
AI-native exposure is much smaller than the cloud-native concentration at the COVID peak, suggesting significant untapped potential in the AI market.
The company is open to M&A if it fits the platform, indicating a proactive approach to strategic growth.
Bears will say no accel and slower growth than DDOG/SNOW at similar multiple and expectations were high heading in. Bulls will say the 26% Q3 Atlas guide is conservative and likely comes in near 29-30%, which means no signs of decel and keeps accel hopes al...
The company experienced a stock price decline, partly due to a large LLM customer migrating to Chronosphere from an incumbent vendor.
ISI also sees the new enterprise GTM motion gaining traction, with >$1M ARR customers +26% y/y, and views MDB’s discount to SNOW/DDOG as leaving room for a rerating.
BNP Paribas noted that hiring accelerated in July, and sales job openings increased, which is a potentially positive leading indicator for future top-line growth.
BNP Paribas says DDOG and CDNS hiring accelerated in July, while sales job openings also increased versus six months ago, a potentially positive leading indicator for future top-line growth. Rep quota attainment improved across much of software, particularl...
DDOG remains among the names with the lowest percentage of reps hitting quota.
Citi reiterates Buy, raises its PT to $65 and adds a 90-day positive Catalyst Watch, arguing DT’s recent underperformance and Arize AI acquisition create a better risk/reward setup. Citi sees Arize accelerating Dynatrace’s “observability for AI” roadmap and...
AI demand is broadening across the business, while observability, security, and newer products continue to scale.
The company highlights strong MCP server usage, expansion of Bits AI into agentic use cases, and healthy new-customer contribution.
Management sees AI as a secular tailwind rather than a narrow AI-native customer story.
Go-to-market strategy remains strong.
Security is still more of a work in progress, particularly around SIEM and Code Security.
The "buy the dip" strategy did not last long, indicating a lack of sustained investor confidence after its decline.
Investors showed a willingness to buy the dip on misses, indicating a broadening risk appetite outside AI semis.
The stock showed significant buy-the-dip energy, indicating investor confidence even after a miss.
The company delivered a solid beat-and-raise, with revenue growth accelerating to 36% and margins beating expectations.
The FY26 revenue guidance raise exceeded the quarterly beat pass-through.
The F3Q guidance, while beating Street, landed below the elevated buyside bogey of ~31%, implying a sharper deceleration into F4Q.
The stock's significant drop of 20% suggests a reset was understandable given crowded long positioning, despite the solid results.
SNDK -10% & WDC -14% missed in semis; DDOG -18% lower after missing Q3 bogeys; HUBS -23% with signs the AI disruption is real & FIG -15% likely help take down some of the recent app sw rally; APP -18% with a very disappointing print; only some internet name...
Some investors were surprised by the magnitude of the stock's decline.
Bears pointed to the Q3 guidance being below buyside expectations.
The limited benefit from what should have been a stellar Anthropic contribution hints that optimizations may be occurring, suggesting growth is narrower than expected.
The company explicitly stated a reduction in usage from a specific customer (OpenAI) and fully de-risked guidance for the rest of the year with respect to that customer.
FundaAI checks support 35% year-over-year revenue growth in 2Q, with core growth accelerating to approximately 28% and growth excluding OpenAI exceeding 30%, driven by enterprise expansion, cloud migration, and larger deals.
FundaAI expects Anthropic and other LLM customers to largely offset the decline in OpenAI usage, with AI-native revenue estimated at approximately $170M, or 15% of total revenue.
FundaAI anticipates 3Q guidance near 30% versus Street expectations of 25%, and expects FY26 guidance to increase by approximately $100M to $4.42B.
Wells Fargo's 2Q survey, representing approximately $95M of annual Datadog spend, showed most large customers expect to increase spending in 2026 and continue shifting share towards DDOG from other observability vendors.
The survey results reinforce Datadog's durable share-gain story and continued enterprise expansion, with demand viewed as constructive into 2H26.
A 10%–20% quarter-over-quarter decline in OpenAI usage partially offsets strong growth drivers.
FundaAI warns that crowded positioning may limit the post-earnings stock reaction despite strong guidance.
Wells Fargo's 2Q survey was modestly softer than 1Q, partly because the latest respondent mix included smaller customers with narrower platform usage.
Strong partner checks and measurable AI-native demand support continued revenue growth acceleration.
DDOG/DT: BTIG Field Checks Show AI Driving Strong Observability Demand
BNP's reseller survey found that the company's sales tracked a few points above plan due to product functionality, competitive wins, and strength in infrastructure monitoring, APM, and AI-related use cases.
UBS maintains a Buy rating after customer checks reinforced that observability remains a priority spend area as enterprises accelerate AI deployments.
Customer checks improved, with the company gaining share through vendor consolidation and expanding into hybrid environments.
UBS still sees 30%+ growth in 2026 and expects another acceleration in 2Q.
BNP's survey indicated that overall IT spending intentions weakened sharply, and resellers expect cybersecurity momentum to trail other categories over the next three months, suggesting demand may have been concentrated in 2Q.
The company's forward spending score fell significantly, creating a more mixed setup despite solid recent execution.
Pricing pushback remains the main friction point.
The setup is tougher after the stock’s rally and valuation near 20x revenue and 75x FCF.
The stock continues to be a favored hiding place for software investors.
SNOW +3% / DDOG +4% continue to be two favorite places for sw investors to
The stock was holding up well.
The stock performed positively, indicating resilience among cloud consumption names.
Cloud consumption names held up ok with MDB/SNOW down less than 1% and DDOG +1.5%
Hyperscaler AI capex should continue expanding, supporting "token path" winners.
Bernstein raised its long-term estimates for Datadog due to increased confidence in the company's AI platform opportunity.
Bernstein expects a strong second quarter for Datadog.
Bernstein raised its long-term estimates for the company.
Bernstein downgraded the stock to Market Perform due to valuation concerns and elevated near-term expectations.
Growth is expected to disappoint starting in Q3/Q4 as non-AI demand flattens and AI lab growth normalizes.
Bernstein expects Q4 revenue growth to slow to approximately 29% year-over-year, which is below investor expectations for over 30% growth into next year and peak growth in the high 30% to 40%+ range.
Bernstein issued a "tactical" downgrade, citing potential disappointment in growth starting in Q3/Q4 as ex-AI demand flattens and AI lab growth normalizes.
The acquisition of Adaptive ML is a strategic addition that accelerates Datadog's AI roadmap by adding reinforcement learning capabilities to support proprietary AI agents and observability products.
The deal enhances Datadog’s ability to build differentiated AI offerings, making the firm incrementally more confident that the company can meet or exceed near-term targets while strengthening its long-term growth trajectory.
Citi raised its price target for Datadog, arguing that its competitive position continues to strengthen as enterprises scale AI and agentic workloads.
Customer feedback was positive on AI observability demand, with strong interest in Bits AI and Cloud Cost Management, and robust displacement opportunities against competitors with limited competitive pressure from open-source alternatives.
Citi believes that investor concerns regarding tokenization, export controls, and lab-customer concentration are overstated relative to Datadog’s expanding AI opportunity, growing enterprise adoption, and ability to capture incremental observability spend.
The stock showed slight outperformance, being down only modestly, due to positive sell-side mentions.
Truist upgraded the stock to Buy and raised its price target to $300, believing that enterprise AI adoption is outweighing concerns about AI optimization.
Customer and partner conversations indicate Datadog is in the early stages of AI-driven growth, with non-AI-native enterprises increasingly deploying agents that require more telemetry, monitoring, and observability.
Truist noted improving confidence in the durability of Datadog's relationships with frontier AI labs, which reduces a key overhang on the stock.
Despite an expanded valuation, Truist believes the Street underestimates the durability of consumption growth and the market opportunity as AI adoption broadens across enterprises.
Cloud consumption is strong, indicating healthy demand for the company's services.
Cloud consumption strong: SNOW/MDB +3-4% while DDOG +1.4%
BNP Paribas became more constructive on the company's growth durability after customer discussions, noting stronger-than-expected enthusiasm across observability, security, and AI-related offerings.
Products like Bits AI, AI Guard, Database Monitoring, Network Monitoring, and Query Optimization generated strong interest, with customers viewing AI as a catalyst for increased observability spend.
Customer conversations suggested Datadog is benefiting from growing demand for AI workload monitoring, application tracing, security safeguards, and full-stack visibility across complex cloud environments.
The company outperformed within the software sector, specifically in cloud consumption.
In Tech, Semis +8% led the way higher with SOX crossing back above ST moving averages. Despite the index still being 3-4% below its highs, we’re already seeing some individual names/themes breakout: Semicap continues its strength with names like LRCX, AMAT...
Wedbush raised its price target to $260, becoming more constructive on the company after DASH 2026, highlighting over 100 product launches and a focus on autonomous operations across development, security, and observability.
The company is evolving into a full-stack platform that helps enterprises manage complex AI-driven environments, with new products spanning AI observability, security, workflow automation, remediation, and developer productivity.
Strong customer adoption of AI-focused offerings like Bits AI, Agent Console, Journey Monitoring, and AI Guard expands its role across the software lifecycle and creates additional share-gain opportunities.
BofA identifies the company as one of the 'Fab Five' infrastructure software names best positioned for 2H outperformance, benefiting from strong execution, AI tailwinds, differentiated products, and improving go-to-market effectiveness.
The company delivered better-than-expected results in 1Q, with AI increasingly acting as a growth accelerator.
BofA is particularly constructive on the company's AI business.
BofA highlighted DDOG, FROG, MDB, SNOW, and TWLO as its preferred infrastructure software names for 2H26, arguing all five are benefiting from the combination of strong execution, AI tailwinds, differentiated products, and improving go-to-market effectiveness.
The firm noted each company delivered better-than-expected results in 1Q, with AI increasingly becoming a growth accelerator rather than a future opportunity. BofA is particularly constructive on DDOG’s AI business, accelerating adoption at SNOW, AI-driven...
The company showed growing evidence of AI-driven acceleration.
The stock was up double digits, indicating strong investor interest.
The Adobe, Zomato, ElevenLabs, and frontier-lab references create a narrative that MDB may benefit later than SNOW/DDOG, but potentially with a durable and high-value workload stream once customer-facing agentic apps move into production.
SNOW/DDOG-style AI revenue acceleration may appear earlier in data warehousing, analytics, observability, or AI-native infrastructure, while MDB’s upside depends on AI apps moving into production and needing persistent operational data.
MDB +9% and DDOG +4% up in sympathy along with some other software stocks.
Positioning here had been on the lighter side with many favoring DDOG, and even MDB as of late, so the big move capturing some of that lighter sentiment this morning. We think path of least resistance likely higher here as SNOW still 15% below 2025 lows.
The company reached new highs, indicating strong performance within the software sector.
BofA raised its PT following channel checks that pointed to improving demand trends across observability, security, and software supply-chain tooling.
Increasing AI-driven application complexity and enterprise modernization are driving stronger need for best-of-breed monitoring/security platforms, with the company benefiting from rising observability requirements.
BofA believes the company could continue delivering upside to Street estimates given improving execution and resilient infrastructure software spending trends.
DDOG/FROG: BofA Raises PTs Following More Constructive Infrastructure Software Demand Checks
The stock continues to quietly reach new highs and likely remains the most favored software stock.
DDOG +60bps continue to quietly hit new highs likely remaining the most loved sw stock right now with Cyber (CRWD/PANW) a close 2nd.
SNOW +4% as UBS had positive checks around Cortex code, saying most customers confirming rising adoption. Karl thinks bull case around Cortex monetization is becoming more tangible. Key debate on stock around Q2 guide given tough compares going forward and...
Charts looking better here for some stocks that have lagged: GTLB +%; ZS +6% but others like CRM +2%, ADBE+25bps or HUBS continue to look worse, which points to the increasing bifurcation in software stocks theme we have been writing about (cyber, DDOG hitt...
The company continues to hit new highs, up 12% in follow-through after beating expectations a couple of weeks ago.
SNOW +4% as UBS had positive checks around Cortex code, saying most customers confirming rising adoption. Karl thinks bull case around Cortex monetization is becoming more tangible. Key debate on stock around Q2 guide given tough compares going forward and...
Charts looking better here for some stocks that have lagged: GTLB +%; ZS +6% but others like CRM +2%, ADBE+25bps or HUBS continue to look worse, which points to the increasing bifurcation in software stocks theme we have been writing about (cyber, DDOG hitt...
Benchmark also highlights constructive reads from DDOG/JFrog/Nebius/DOCN checks and believes Snowflake remains well positioned to sustain ~30% product revenue growth through FY27 as AI workload adoption broadens.
The CEO expressed bullish sentiment at the JPM conference, highlighting acceleration across every part of the business, including both AI-native companies and the existing non-AI business, driven by cloud migration and the need for modernization.
DDOG +3% to new highs as CEO sounded bullish at the JPM conference giving a masterclass in how many times you can say the magic tech word for tech investors: acceleration.
The company's beat yesterday was noted, implying strong performance.
In tech land, HUBS -22% blow up showing app sw not in same league as consumption sw after DDOG’s beat yesterday, AKAM rallying on a big deal, NET down on an expects miss, MCHP the latest analog to beat, CRWV down on a weaker guide, ABNB looks solid, QCOM co...
The company delivered a stellar beat and raise, with revenue reaccelerating to 32% from 29% in the prior quarter.
The FY26 guide calls for 26% growth, ahead of the street's expectation of closer to 20%.
The midpoint of the FY26 guidance was raised more than the combined Q1 beat and Q2 guide upside, implying a strong second half and mitigating concerns about a growth cliff related to OpenAI.
Management indicated increasing engagement in training, landing hyperscalers who use DDOG despite having their own homegrown capabilities, which was seen as very bullish.
The print brought renewed bullishness to cloud consumption names, with investors more confident that a beat would be rewarded.
One could make a strong argument that DDOG & FTNT (or cyber in general) is helped by AI demand, while the case is hard to make for something like WDAY or NOW or FIG. It’s still unclear how that latter group would respond to strong numbers.
The former weighted down by ARM/COHR misses and the latter helped by DDOG/FTNT’s better prints, giving software bulls hope that there is alpha to be had in the space and that a good print will be rewarded with a good move. However, DDOG and FTNT different t...
Datadog's 1Q26 trends held up, showing a clear bifurcation where AI-native customers are accelerating spend, and the near-term setup is healthier due to the OpenAI migration being pushed to 4Q26.
AI is driving a step-up in telemetry demand, indicating a positive long-term driver for the company.
Traditional enterprises remain cautious with their budgets, shifting spending towards AI, which could impact Datadog's growth from non-AI native customers.
Bits AI traction is limited outside of AI-native cohorts and has mixed ROI, suggesting it remains a longer-term driver rather than an immediate growth catalyst.
The key debate for Datadog remains the 2027 OpenAI cliff, and whether other AI-native customers can offset the potential revenue gap from the migration.
The stock saw a positive bid, indicating strong performance among cloud consumption names.
Bernstein sees 1Q26 tracking approximately 30% topline growth, with AWS web metrics being the strongest quarter-over-quarter since COVID, and raises H1'26 estimates.
Oppenheimer reiterated Outperform with a $200 price target, stating that the company is set up for a solid 1Q with approximately 3% upside to revenue, despite some moderation from OpenAI.
Checks point to steady consumption and a stable competitive environment.
The firm highlights improving core growth excluding OpenAI, re-accelerating from approximately 24.7% to over 25%, and continued strength in enterprise customer adds, with approximately 2.7K net adds TTM.
LLM disruption risk is seen as manageable given Datadog’s domain expertise and ability to support optimized SLMs.
Oppenheimer points to multiple growth levers, including logs/security products, AI-native customer ramp, international expansion, and channel investments, supporting a path to sustained high-teens to 20%+ growth.
Bernstein sees DDOG's 1Q26 tracking ~30% topline growth (AWS web metrics strongest QoQ since COVID) and raises H1'26 estimates, but adds H2 conservatism — modeling the largest "Born in AI" customer (believed OpenAI) as a -400bps Q4 headwind from contract do...
Bernstein adds H2 conservatism, modeling the largest "Born in AI" customer (believed to be OpenAI) as a -400bps Q4 headwind from contract downsizing, with AI tailwinds normalizing by H2'26.
Checks suggest Chronosphere's OpenAI ARR hit approximately $40-60 million by EOY'25, with Q1'26 adding tens of millions more, pitching 40-60% savings, putting $130-170 million of Datadog's OpenAI ARR at risk.
The company is entering Q1 with strong momentum, supported by improving channel checks indicating healthier pipelines, increased GenAI activity, and better large-enterprise demand sequentially.
Morgan Stanley expects approximately 30% year-over-year Q1 growth, exceeding consensus estimates, driven by acceleration in the core business, stronger bookings, and recent large customer wins.
The recent pullback in valuation and cautious investor positioning create an opportunity for a positive post-earnings reaction if improving checks translate into sustained growth acceleration.
Morgan Stanley sees approximately 30% Q1 growth, supported by improving channel checks pointing to healthier pipelines, stronger GenAI activity, and better large-enterprise demand quarter-over-quarter, with workloads moving from pilot to production.
The company's valuation remains elevated.
The company was upgraded to Buy as concerns about OpenAI exposure are easing, with checks suggesting migration will take longer than expected, allowing for a graceful failover.
The firm now models higher revenue growth for 2026, with strong contributions from core business, OpenAI, and AI natives.
Bits AI is identified as a category leader in agentic observability with outcome-based pricing optionality, and the observability TAM is understated given the extensive human oversight required for agents.
The company's performance at a recent meeting was reportedly not strong, contributing to a sell-off.
Bernstein argues that the Airbnb churn headlines overstate the risk, as the migration likely occurred in 2024-2025, with the revenue impact already absorbed.
The Airbnb situation fits a narrow pattern of large customer losses, and most top global consumer internet brands have already moved to self-built infrastructure, indicating a decreasing exposure to this headwind.
Benchmark initiated coverage with a Buy rating and a $150 price target, calling Datadog a top infrastructure pick poised to benefit from AI-driven complexity, which accelerates the need for its monitoring, APM, and security products.
The firm highlighted over $3.2 billion in cumulative R&D since 2021, a record of over 400 features released in 2025, and an expected Rule of 54 in FY25, sustaining at 45+.
Revenue is expected to exceed $4 billion this year and $5 billion next, with the founder-led team remaining intact.
Valuation concerns that previously held back cloud consumption names like this one have eased.
Cloud consumption continue to act better: SNOW +2.3%; MDB flat; DDOG +3.5%.
Cloud consumption names strong: MDB +50bps; SNOW +1.3%; DDOG +2.3%.
The company's stock was weaker, consistent with other consumption names.
The company reported strong Q4 results and provided better-than-expected guidance, with its core business showing meaningful reacceleration.
The company's guidance explicitly assumes its non-AI business will grow at least 20%, and record bookings and large deal activity indicate a strong return to enterprise consolidation.
The strong print shifts the narrative from concerns about AI distorting results to AI expanding the total addressable market and accelerating platform adoption.
After MNDY’s miss, then DDOG’s beat and now NET (assuming it holds), we’re beginning to see a bifurcation in software after consumption all got lumped in with the bad stuff over the last couple of weeks.
The primary concern for bears was the company's FY26 operating margin guidance, which was below street expectations.
The stock caught a bid in sympathy with DT's strong performance.
Bernstein reiterated an Outperform rating and a $180 price target, identifying it as a top cloud-infrastructure pick for H1'26 with potential for approximately 54% upside.
The analyst believes the forecast of approximately 25% ex-AI growth in 2026 may be conservative.
Born-in-AI revenue is projected to grow approximately 55% year-over-year.
CIO surveys and AWS-based modeling support strong demand outside of OpenAI.
The stock rose after an analyst named it a top pick for the first half of 2026, believing the company's full-year guidance of 20-21% will be conservative and that it can achieve over 25% growth excluding AI in 2026.
The analyst also highlighted unusually strong web metrics for AWS in the second half of 2025, which he uses to track the company.
The stock pulled back from over $200 post-Q3 due to competitive noise related to Palo Alto's Chronosphere deal.
OpenAI growth is expected to slow to approximately 10% in 2026 compared to the Q3'25 run rate.
Competitive narratives and near-term OpenAI revenue pressure, including potential quarter-over-quarter declines as usage shifts to contracted pricing, are identified as risks.
Morgan Stanley upgrades Datadog to Overweight and reiterates a $180 price target, citing improving underlying growth trends heading into 2026, driven by re-accelerating core observability demand from renewed cloud migration and digital transformation.
Incremental upside is expected from the ramp of agentic AI applications that require observability to operate effectively.
While near-term risk to 2026 guidance remains, any potential estimate reset is viewed as a clearing event as public cloud growth improves and Datadog’s core business (over 90% of revenue) strengthens.
Improving contribution from newer products and optionality around AI-driven workloads support sustained growth into 2027 and beyond.
Goldman Sachs assumes coverage with a Sell rating and a $113 price target, implying approximately 14% downside, citing a tougher competitive and pricing backdrop heading into 2026.
Rising AI-driven data volumes and cardinality are pushing customers to re-evaluate observability spend, despite Datadog being a comprehensive platform.
Intensifying competition from Grafana, ClickHouse, Chronosphere, CrowdStrike, Snowflake, and AWS's aggressive push to capture observability budgets could drive a shift toward a more deflationary industry architecture.
These dynamics are likely to result in slower revenue growth, higher operating expenses or M&A intensity, and multiple pressure over time.
Datadog was removed from BofA's US1 List.
The stock was among the software names that were clipped, including app software, secular growth winners, and consumption names.
Software was also heavy (Software -1.4%, Expensive Software -2.6%) with not much spared as app sw / secular growth winners / consumptions names all getting clipped (DDOG -7.6%, MDB
are at: they of the process CFLT Ek 10%, lmiittiBim, B5x SNOW +6% / DDOG +5% helped by bid to Al names SNOW +6% / DDOG +5 %aFXA Iaaz# FIG +15% continues to squeeze after OAI Dev mention day APP -1.3%: We get northbeam data tomorrow Our friends at EundaAL we...
The coming week is packed with reports that should help fill in some blanks in tech as Q3 gets under way. Expect meaningful updates across a wide spectrum: a clearer picture of hyperscaler capex trajectories (META, MSFT, AMZN), critical reads on the pace an...
Research through 2026-11-03 · 2025-07-28 to 2026-11-03 · 68 source reports.
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Research through 2026-11-03. Artifact validity does not establish factual accuracy or research freshness.