Stifel maintains Hold rating on Datadog stock amid AI strategy shift

Published 12/09/2025, 12:42
Stifel maintains Hold rating on Datadog stock amid AI strategy shift

Investing.com - Stifel has reiterated its Hold rating and $135.00 price target on Datadog (NASDAQ:DDOG), currently trading at $139.15, following the company’s mid-quarter check-in on Thursday. The stock has seen a notable 36% gain over the past six months, with analyst targets ranging from $105 to $200.

During the session, Datadog management did not provide an intraquarter consumption update, maintaining its typical practice from previous meetings.

The check-in featured a recent interview with CEO Olivier Pomel, who discussed how generative AI has transformed Datadog’s product development approach from a traditional customer-led process to a faster-paced, more speculative strategy.

The meeting also covered how recent hyperscaler acceleration has impacted Datadog’s growth and examined trends in monitoring AI workloads.

Stifel views Datadog’s core stability as encouraging and considers increasing hyperscaler commitments from generative AI vendors as positive, but recommends patience due to uncertainty surrounding the OpenAI renewal. The company’s solid financial position is reflected in its healthy current ratio of 3.43, though current market prices suggest the stock is slightly overvalued according to InvestingPro Fair Value estimates.

In other recent news, Datadog has reported strong second-quarter 2025 results, leading to positive reactions from several investment firms. Cantor Fitzgerald raised its price target for Datadog to $179, emphasizing the company’s robust quarterly performance that surpassed market concerns, particularly regarding potential in-sourcing by a major AI customer. Bernstein also increased its price target to $147, describing the quarter as a "blowout" with significant performance exceeding expectations. Needham reiterated its Buy rating on Datadog, maintaining a price target of $175, and anticipates the company’s Annual Recurring Revenue to surpass $3.5 billion in the upcoming quarter. In other developments, Datadog achieved "In Process" status for GovRAMP High Authorization, enhancing its security credentials for public sector clients. Additionally, the company appointed Ami Vora, a former WhatsApp product leader, to its Board of Directors. These recent developments reflect Datadog’s ongoing growth and strategic advancements in the industry.

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