Analysts at Morgan Stanley, BTIG, and Citi raised Datadog’s price targets, citing strong AI-driven revenue growth ahead of earnings.
Datadog (DDOG) shares rose 7.7% after Morgan Stanley, BTIG, and Citi raised their price targets to $300, $289, and $300, respectively, reflecting 11%-33% increases. The revisions follow a 32% year-over-year revenue jump to over $1 billion in Q1, with annualized revenue run-rate exceeding $4 billion.
The company’s growth is increasingly driven by AI-native clients, with five now contributing over $10 million in annual recurring revenue. Customers spending at least $100,000 annually grew 21% to 4,550, while non-AI-native customer growth slowed to the mid-20% range.
Datadog’s shift toward AI infrastructure observability supports higher valuations, with analysts maintaining bullish ratings ahead of the August 6 earnings report.