Bank of America reaffirms its bullish stance on DDOG, targeting $305 as the stock drops on OpenAI-related revenue concerns.
Datadog Inc. (DDOG) shares plunged as much as 19% after the company warned its largest customer, widely believed to be OpenAI, would reduce usage starting in Q3. The pullback could carve a $150 million hole in revenue despite a recent nine-figure renewal covering 17 products.
The company beat Q2 earnings and revenue estimates and raised full-year guidance for the third consecutive quarter. Analysts had previously flagged risks from OpenAI developing in-house monitoring tools, though DDOG shares nearly doubled over the past year.
Bank of America analysts Koji Ikeda and George McGreehan reiterated their buy rating and $305 price target, arguing the selloff overstates the impact of a single customer’s slowdown. The target implies 33% upside from the post-selloff close.