Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - UBS raised its price target on Datadog (NASDAQ:DDOG) to $189.00 from $165.00 on Thursday, while maintaining a Buy rating on the cloud monitoring company’s stock. The stock, currently trading at $163.97, has shown impressive momentum with a 68% gain over the past six months. According to InvestingPro data, 32 analysts have recently revised their earnings estimates upward for the upcoming period.
The price target adjustment came after UBS analysts attended the New York-based user conference for ClickHouse, an emerging rival to both Datadog and Snowflake, to assess competitive dynamics in the observability space.
UBS specifically focused on understanding how OpenAI, described as Datadog’s largest customer with an upcoming contract renewal, was using ClickHouse and whether this might impact OpenAI’s relationship with Datadog.
The firm concluded that while ClickHouse is gaining market share in log management at Datadog’s expense, this competitive pressure does not necessarily mean OpenAI will not renew its Datadog contract.
UBS maintained its Buy rating based on Datadog’s calendar year 2026 revenue and free cash flow multiples of 13x and 50x respectively, suggesting the company still has growth potential even amid increasing competition.
In other recent news, Datadog has seen several key developments that may interest investors. The company announced it has reached 1,000 integrations on its monitoring platform, enhancing its coverage across various technologies, including AI and cloud services. This expansion includes new integrations for AI infrastructure such as NVIDIA GPU monitoring and partnerships with large language model providers like OpenAI and Anthropic. On the financial side, DA Davidson raised its price target for Datadog to $180, citing positive usage growth and potential acceleration in service adoption. Bernstein also increased its price target to $170, attributing the decision to strong cloud consumption trends in the latter half of the year. Meanwhile, Wells Fargo initiated coverage with an Overweight rating and a $190 price target, noting Datadog’s AI-native customer base as a significant growth driver. Stifel maintained a Hold rating with a $135 target, following the renewal of Datadog’s contract with OpenAI, although the firm noted limited visibility on the contract’s size. These developments indicate a robust period for Datadog, with multiple firms recognizing its strategic advancements and growth potential.
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