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Investing.com - Cantor Fitzgerald has raised its price target on Datadog (NASDAQ:DDOG) to $179 from $171 while maintaining an Overweight rating following the company’s second-quarter 2025 results. The company, currently valued at $46 billion, maintains a "GOOD" financial health score according to InvestingPro analysis, with impressive gross profit margins of 80%.
The investment firm cited Datadog’s "strong beat/raise" quarterly report that exceeded market concerns, particularly those related to potential in-sourcing by the company’s largest AI native customer, which Cantor estimates represents approximately 6.5% of Datadog’s Q2 revenue. The company’s robust performance is reflected in its 25.5% year-over-year revenue growth.
Cantor Fitzgerald expressed encouragement regarding Datadog’s increased second-half guidance, noting solid performance in the AI native segment following the fourth-quarter 2024 contract renewal with its largest customer in that category.
The firm observed that excluding the large AI native customer, Datadog’s overall business growth remained stable compared to the first quarter, indicating continued prudence from large enterprises due to macroeconomic conditions.
Cantor maintains that Datadog is "best positioned" to benefit from growth in the AI native sector while continuing to capitalize on enterprise adoption of its tools, factors that justify the premium multiple and Overweight rating.
In other recent news, Datadog reported strong second-quarter 2025 earnings, with revenue reaching $827 million, marking a 28% year-over-year growth. This performance exceeded management’s guidance and Wall Street’s expectations, with operating margins hitting 20%, aligning with analyst estimates. As a result, several firms have adjusted their price targets for Datadog. Evercore ISI raised its target to $170, while DA Davidson increased it to $170 as well, both maintaining an Outperform or Buy rating. Bernstein also raised its price target to $147, describing the quarter as a "blowout" and the largest dollar beat versus guidance in the company’s history. Mizuho (NYSE:MFG) raised its target to $155, noting the revenue growth as a "larger than typical upside." Additionally, Needham maintained its price target at $175, highlighting strong usage trends from AI-Native customers, which now contribute significantly to revenue growth. These developments reflect a positive outlook from analysts, driven by Datadog’s impressive financial performance and growth in AI-related business segments.
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