Shares of Datadog Inc (NASDAQ:DDOG) jumped in early trading on Friday, after the company reported strong second-quarter results.
Here are the key analyst takeaways:
- Needham analyst Mike Cikos reiterated a Buy rating, while raising the price target from $260 to $300.
- BofA Securities analyst Koji Ikeda reaffirmed a Buy rating and price target of $305.
- Rosenblatt Securities analyst Blair Abernethy reiterated a Buy rating and price target of $305.
- DA Davidson analyst Gil Luria reiterated a Buy rating and price target of $315.
- Cantor Fitzgerald analyst Thomas Blakey maintained an Overweight rating and price target of $327.
Check out other analyst stock ratings.
Needham: Datadog reported strong results, with year-on-year revenue growth accelerating to 36%, from 32% in the previous quarter, Cikos said. He added that revenues outperformed consensus estimates by $42.9 million, driven by:
- AI customers continuing to grow and diversify
- Non-AI customers continuing to accelerate
The largest AI customer signed a nine-figure renewal with Datadog for 17 products in the third quarter, the analyst stated. Management raised its full-year outlook to a range of $4.45-$4.47 billion. Its previous outlook hovered between $4.30-$4.34 billion, reflecting around 30% growth.
BofA Securities: Datadog raised its full-year revenue guidance by $140 million. This reflects the company’s confidence in its execution capabilities, Ikeda said. Third-quarter guidance implies $19 million in net-new total revenue — lower than the second quarter’s $115 million.
Usage at Datadog’s largest AI-native customer is slowing, and management is being "extra conservative" with their guidance, Ikeda said. The company is "becoming more strategic in the AI world," he further wrote.
Rosenblatt Securities: Datadog’s total revenues grew 36% year-on-year to $1.121 billion, beating consensus by 4%, Abernethy said. He added that the results were driven by:
- Incremental growth in usage and additional product adoption by existing customers
- Continued strong AI-native contribution
- Continuing product traction in areas like logs and Cloud SEIM (security information and event management
"Datadog continues to broaden customer tool adoption, with 85% of customers using 2+ products, 58% using 4+ and 37% using 6+," the analyst wrote. The company raised its full-year revenue guidance by 3% to reflect around 30% growth, implying significant growth in the back half of the year "in the high 20%’s," he further stated.
DA Davidson: Datadog reported a strong beat-and-raise quarter, with usage accelerating across its customer base, Luria said. The company’s biggest update was the nine-figure renewal deal with its largest customer. The renewal came with moderated usage starting in the third quarter, he added.
Management de-risked its full-year guidance to reflect the slowdown with this customer, the analyst stated. Datadog has exposure to "multiple durable tailwinds including a rise in new customer growth and broadly winning AI workloads with existing customers," he further wrote.
Cantor Fitzgerald: Datadog’s revenue beat of 4% was around 1 point less than its beat in the previous quarter, Blakey said. The company announced its third-quarter guidance 3% higher than current consensus estimates, compared to 8% in the first quarter.
Management was astute in de-risking their outlook for the back half of 2026, given decreased usage at its largest customer, the analyst stated. "We continue to view Datadog as a key beneficiary of secular AI growth trends, which is driving expanded observability tool and AI usage on the Datadog platform," he further wrote.
DDOG Price Action: Shares of Datadog had risen by 2.27% to $234.49 at the time of publication on Friday.