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Investing.com - Morgan Stanley (NYSE:MS) has raised its price target on Datadog (NASDAQ:DDOG) to $165.00 from $115.00 while maintaining an Equalweight rating on the stock. According to InvestingPro data, the company maintains impressive gross profit margins of 80.15% and shows strong financial health with a current ratio of 2.74.
The investment bank cited Datadog’s continued innovation, market share growth, and sustained business expansion as key factors behind the significant price target increase.
Morgan Stanley analyst Sanjit Singh noted "early signs of a ’build’ cycle emerging" in the sector, which has prompted the firm to take a more positive stance on Datadog shares.
Despite the more optimistic outlook reflected in the higher price target, Morgan Stanley kept its Equalweight rating intact due to what it described as "elevated expectations" in the near term.
The firm had previously downgraded Datadog to Equalweight in early January, but the company’s continued performance has warranted the substantial 43.5% increase in the price target.
In other recent news, Datadog has been added to the S&P 500 Index, marking a significant milestone for the company. The cloud monitoring firm reported $2.8 billion in revenue for the trailing twelve months ending March 31, 2025, reflecting a 26% year-over-year growth. Analysts at TD Cowen reiterated their Buy rating on Datadog, maintaining a price target of $150.00, and noted the company’s inclusion in the S&P 500 could attract a broader audience of large-cap and generalist investors. Wedbush also increased its price target for Datadog to $170.00 from $140.00, citing the company’s momentum in the observability space, particularly with AI advancements. Stifel raised its price target to $135 from $120, highlighting stabilizing customer optimization trends and consistent pricing discounts. Datadog’s recent developments also include the introduction of over 400 products and features at its annual DASH conference. The company’s addition to the S&P 500 is expected to drive significant demand for its shares, further reflecting its growth trajectory since going public.
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