Morgan Stanley analyst Sanjit Singh maintained a Hold rating on Datadog today and set a price target of $165.00.
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Sanjit Singh’s rating is based on a combination of factors influencing Datadog’s current market position and future prospects. The company is experiencing a stable demand environment, and there are positive indicators that core growth could improve as recent bookings convert to revenue. However, the situation is complicated by the strong growth from OpenAI, which is expected to diminish in 2026, posing a risk to initial guidance for that year.
Sanjit Singh notes that while Datadog’s stock has outperformed recently, largely due to optimism around OpenAI, the premium valuation and elevated near-term expectations create a tricky setup. The core business, excluding OpenAI, shows potential for better growth due to steady checks, strong recent bookings, and improving AWS growth. Despite these positives, the uncertainty surrounding OpenAI’s future contribution and the early stage of custom AI application development contribute to the Hold rating, as the overall setup remains challenging.
In another report released on October 6, Stifel Nicolaus also maintained a Hold rating on the stock with a $135.00 price target.