Wang & Lee Group board approves 250-to-1 reverse share split
Investing.com - Stifel has reiterated its Hold rating and $135.00 price target on Datadog (NASDAQ:DDOG), currently trading at $149.84, while expecting a larger-than-normal second-quarter beat driven by accelerating OpenAI usage. According to InvestingPro analysis, the stock appears overvalued at current levels, trading at a P/E ratio of 306.5x.The firm anticipates OpenAI usage growth will accelerate quarter-over-quarter, potentially contributing 9-10% to revenue growth compared to 6% in the previous quarter. This could push Datadog’s second-quarter growth into the high-20% range, building on its impressive last twelve months revenue growth of 25.54% and industry-leading gross margin of 80.15%.While Stifel expects OpenAI to renew their contract in the second half of the year, the firm believes it will likely come with additional price discounting and workload churn. Given OpenAI’s significant Datadog spend, described as "well into the 9 figures," Stifel expects OpenAI to eventually move most or all of this functionality in-house.Stifel suggests that an earlier transition of OpenAI’s business away from Datadog would be beneficial, allowing investors to refocus on Datadog’s core business performance.The firm remains cautious on the stock at current valuations, indicating it would consider a more aggressive stance after seeing potential acceleration in core growth in Q4 2025 or first half of 2026, followed by improving margins driven by sales and marketing productivity improvements. With earnings scheduled for August 7th, InvestingPro subscribers can access 14 additional key insights and a comprehensive Pro Research Report to make informed investment decisions.In other recent news, Datadog is reportedly in talks to acquire Israel-based Upwind for approximately $1 billion, which would be the largest acquisition in the company’s history. This potential acquisition aims to enhance Datadog’s presence in the cloud security market, focusing on cloud-native applications and infrastructure. In light of these developments, BofA Securities has maintained a Buy rating and a $175 price target on the company, while Cantor Fitzgerald has reiterated an Overweight rating with a $171 price target. TD Cowen has also raised its price target for Datadog from $150 to $170, anticipating that the company will surpass its earnings guidance and increase its full-year outlook. TD Cowen’s analysis points to strong demand for Datadog’s observability products and potential market share gains against competitors. Additionally, Datadog has expanded its global infrastructure by launching its full product range on Amazon Web Services’ Asia-Pacific (Sydney) Region. This expansion allows Datadog to meet local data storage and processing requirements, benefiting organizations in sectors like government and healthcare. These recent developments highlight significant strategic moves by Datadog to strengthen its market position.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.