Analyst Sanjit Singh from Morgan Stanley maintained a Hold rating on Datadog and increased the price target to $180.00 from $165.00.
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Sanjit Singh’s rating is based on a combination of factors that reflect both optimism and caution regarding Datadog’s performance. The company has shown a notable acceleration in revenue growth, particularly in its core business excluding AI-native customers like OpenAI. This growth, which increased to approximately 20% year-over-year, is driven by a healthy spending environment for Observability and improved sales productivity due to strategic investments and changes in the go-to-market approach.
Despite these positive developments, Singh maintains a Hold rating due to the stock’s valuation, which is considered high at around 14 times the projected sales for 2027. While the core business acceleration is promising, the initial guidance for 2026 remains a challenge that needs to be addressed. Therefore, while there is potential for the shares to rise if the core acceleration continues, the current valuation and future uncertainties warrant a cautious approach.