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BofA Securities raised its price target on Datadog (NASDAQ:DDOG) to $150 from $138 on Wednesday, while maintaining a Buy rating on the observability software vendor. The new target represents significant upside from the current stock price of $129.22, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
The research firm cited Datadog’s strong execution reflected in healthy revenue growth of 25.54% and impressive gross profit margins of 80.15%, active participation in artificial intelligence, and a strong pace of new product releases as key factors behind the increased target.
BofA expressed confidence that Datadog is positioned to deliver durable revenue growth above 20% alongside free cash flow margins exceeding 20% over the long term, meeting what it called the "Rule-of-40+" threshold.
The price target increase represents a valuation of 13.6 times estimated enterprise value to calendar year 2026 revenue, up from the previous multiple of 12.5 times, according to BofA Securities.
The firm identified Datadog as its "top pick" in its second-half 2025 playbook, suggesting the company’s execution trends could drive potential upside to both BofA’s and Wall Street’s forecasts. InvestingPro analysis reveals 13 additional key insights about Datadog’s financial health, which has received a "GOOD" overall rating, with particularly strong scores in growth and cash flow metrics.
In other recent news, Datadog has been the focus of multiple analyst evaluations following its recent user conference, DASH, held in New York City. Wolfe Research upgraded Datadog’s stock rating from Peerperform to Outperform, setting a price target of $150.00, citing positive developments in AI customer growth and renewed confidence in the company’s trajectory. BNP Paribas (OTC:BNPQY) Exane also reiterated an outperform rating with the same price target, highlighting strong customer interest in Datadog’s Agentic AI capabilities and new On-call product, which could help gain market share. Additionally, UBS raised its price target for Datadog to $140.00 from $125.00, maintaining a Buy rating due to positive feedback on emerging products despite mixed reports on core usage growth.
Cantor Fitzgerald maintained its Overweight rating with a price target of $134.00, expressing confidence in Datadog’s innovation and new product cycle driven by recent acquisitions. Stifel, on the other hand, maintained a Hold rating with a $120 price target, reflecting a balanced view on the company’s growth outlook and investment strategy. The analysts’ reports underscore Datadog’s focus on expanding its product offerings and leveraging AI advancements, with several firms noting the potential for future revenue growth. These developments reflect a varied but generally optimistic outlook among analysts concerning Datadog’s strategic direction and market positioning.
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