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Investing.com - Needham has reiterated its Buy rating on Datadog (NASDAQ:DDOG) stock, maintaining its price target of $175.00. Currently trading at $128.71, the stock appears overvalued according to InvestingPro analysis, though analyst targets range from $105 to $200.
The firm expects Datadog’s Annual Recurring Revenue (ARR) to exceed $3.5 billion for the first time next quarter, with growth in the mid-to-high 20% range.
Needham notes that Datadog’s three core pillars—Infrastructure Monitoring, APM Suite, and Log Management—continue to be the primary growth drivers, collectively representing approximately 90% of total ARR.
The firm highlights the importance of Datadog’s Security Suite, which achieved $100 million in ARR with mid-40% growth in the second quarter of 2025.
Needham also directs investors to monitor new products including Flex Logs, which is reportedly growing at more than 100% year-over-year and likely to become Datadog’s sixth product to reach the $100 million ARR milestone, as well as Database Monitoring and Cloud Cost Management.
In other recent news, Datadog reported impressive second-quarter 2025 financial results, leading to a series of analyst upgrades. The company achieved a revenue of $827 million, marking a 28% year-over-year growth, which exceeded Wall Street’s expectations and management’s guidance. Cantor Fitzgerald raised its price target for Datadog to $179, citing a strong quarterly performance and significant contributions from its largest AI-native customer. Bernstein also increased its price target to $147, highlighting the company’s largest dollar beat versus midpoint guidance in its history. Mizuho adjusted its target to $155, noting the substantial revenue growth that surpassed forecasts. Evercore ISI raised its price target to $170, maintaining an Outperform rating due to Datadog’s accelerated revenue growth and consistent operating margins. Needham kept its price target at $175, emphasizing the robust growth from Datadog’s AI-native customer segment, which now accounts for 11% of total revenue. These developments reflect broad analyst confidence in Datadog’s performance and future prospects.
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