Why Datadog Stock Cruised to a More Than 4% Gain Today
Top of its class
Wednesday morning, Bank of America Securities pundit Koji Ikeda flagged Datadog as being the bank's top pick in the observability software segment. To emphasize this he raised his price target on the stock to $150 per share from his previous $138. He also reiterated his existing buy recommendation.
According to reports, Ikeda expressed confidence that Datadog can deliver 20%-plus revenue growth and free-cash-flow (FCF) margins over a long-term tenure. Customers are eager to use the company's solutions, the analyst surmised from a proprietary survey given to clients, and that sentiment should underpin the continuing improvements.
Ikeda also waxed bullish about Datadog's embrace of artificial intelligence (AI) functionalities to bolster its offerings. He pointed out that the company's take from "AI natives," the AI solutions Datadog has developed, is already significant, comprising nearly 9% of annual recurring revenue (ARR).
Jumps in the fundamentals expected
I'd generally agree with Ikeda's take. Datadog seems to have its finger on the pulse of what its customers want and demand, and has been quite assertive with innovating its products (hence the hearty push into AI). I think the analyst's prediction of continued double-digit gains is realistic, and I'd consider this stock a good one to own.
Should you invest $1,000 in Datadog right now?
Before you buy stock in Datadog, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Datadog wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,386!*
Now, it's worth noting Stock Advisor 's total average return is992% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 9, 2025
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