Latest news with #cloudmonitoring
Yahoo
05-07-2025
- Business
- Yahoo
The Newest Stock in the S&P 500 Has Soared 315% Since Its 2019 IPO, and It's a Buy Right Now, According to Wall Street
Datadog has been granted admission to the S&P 500 index, one of just 5 companies to make the grade so far in 2025. The company's cloud monitoring and security platform is a leader in the field, with a long track record of industry accolades. Despite its impressive history of growth, Wall Street still believes the stock is a buy. 10 stocks we like better than Datadog › The S&P 500 is widely regarded as the most comprehensive gauge of the U.S. stock market, made up of the 500 leading publicly traded companies in the country. Given the extensive reach of the businesses that comprise the index, it is hailed as the most reliable benchmark of overall stock market performance. To be considered for admission to the S&P 500, a company must meet the following criteria: Be a U.S.-based company Have a market cap of at least $20.5 billion Be highly liquid Have at least 50% of its outstanding shares available for trading Be profitable based on generally accepted accounting principles (GAAP) in the most recent quarter Be profitable over the preceding four quarters in aggregate Datadog (NASDAQ: DDOG) is the latest addition to the S&P 500, scheduled to join the benchmark on July 9. That makes it one of only five companies to make the cut so far this year. Since its initial public offering (IPO) in late 2019, Datadog has soundly thrashed the market, generating gains of 315%, compared to just 109% for the S&P 500 (as of this writing). The stock price gains have been fueled by its robust underlying fundamentals, as its revenue has jumped 694% and net income has soared 2,670%. Yet, despite the stock's impressive performance and the company's strong track record of growth, many believe the runway ahead is long for Datadog. Let's examine the opportunity ahead and why Wall Street considers the stock a strong buy despite its premium valuation. The digital transformation is ongoing, driven by the continued adoption of cloud computing and the increasing use of artificial intelligence (AI). Many companies are heavily reliant on their digital presence, and they need a way to continually monitor their websites, apps, servers, and other cloud-based systems to ensure they stay up and running. That's where Datadog comes in. The company's sophisticated monitoring and analytics platform continuously tracks cloud-based business systems, processes millions of data points every hour, and notifies developers of issues before they result in critical downtime. Datadog's software-as-a-service (SaaS) tools go further, getting to the root of the problem to help prevent it from recurring. Datadog boasts a lengthy list of industry accolades that underscore the strength of its monitoring and security solutions. It was selected as a leader in the 2024 Magic Quadrant by Gartner for observability platforms. It was also named in the Forrester Wave report for artificial intelligence ops platforms (AIOps) for the second quarter of 2025. There are more examples, but you get the point. Don't take my word for it. Datadog's most recent results paint a convincing picture. In the first quarter, revenue of $762 million grew 25% year over year, resulting in adjusted earnings per share (EPS) of $0.46. Perhaps as importantly, the company's free cash flow continues to march higher, rising to $244 million, an increase of 30%. The strong financial results were fueled by equally robust business execution. Datadog's customer base increased to 30,500, up 9%, while customers spending $100,000 in annual recurring revenue (ARR) jumped 13% to 3,770. Furthermore, existing customers are expanding their relationships: 83% of customers are using two or more products, up from 82%. 51% are using four or more products, up from 47%. 28% are using six or more products, up from 23%. 13% are using eight or more products, up from 10%. This land-and-expand strategy, combined with the introduction of new products -- particularly those focused on the adoption of AI -- bodes well for Datadog's future. Datadog lowered its guidance earlier this year in response to the on-again, off-again tariffs, but Wall Street remains bullish. Of the 46 analysts that covered the stock thus far in July, 38 rate it a buy or strong buy, 8 label it a hold, and not one recommends selling. Analysts at Loop Capital are among the most bullish, maintaining a buy rating and $200 price target on the stock, which suggests potential upside of 48% for investors, compared to the stock's closing price on Wednesday. The analysts cite Datadog's growth trajectory and increasing total addressable market (TAM) -- which the company believes will hit $175 billion by 2034 -- as the foundation for their optimistic call. Furthermore, they believe Datadog's free cash flow will climb to $7.9 billion over the coming decade, which helps illustrate the company's long-term growth potential. To be clear, Datadog has never been cheap. The stock is currently selling for just 76 times next year's earnings and 14 times next year's sales. However, the most commonly used valuation metrics struggle with high-growth companies, and Datadog is no different. When measured using the more appropriate forward price/earnings-to-growth (PEG) ratio, the multiple comes in at 0.4; any number less than 1 is the standard for an undervalued stock. Given its long history of growth, strong secular tailwinds, and Wall Street's bullish take, I would submit that Datadog is a buy. Before you buy stock in Datadog, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $976,677!* Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Danny Vena has positions in Datadog. The Motley Fool has positions in and recommends Datadog. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy. The Newest Stock in the S&P 500 Has Soared 315% Since Its 2019 IPO, and It's a Buy Right Now, According to Wall Street was originally published by The Motley Fool
Bloomberg
03-07-2025
- Business
- Bloomberg
Stock Movers: Synopsys Jumps, Meta's strong labor productivity, Datadog will enter S&P 500
On this episode of Stock Movers: Synopsys Jumps, Meta's strong labor productivity, Datadog will enter S&P 500 The US lifted export license requirements for chip design software sales in China, clearing the way for the companies to resume services. Bloomberg Intelligence analysts Niraj Patel and Maria Beltran write that both Synopsys and Cadence are 'likely to resume electronic design automation (EDA) sales to China after Siemens said it had been informed of the removal of some US export restrictions." Chinese customers represent 14% of sales for Synopsys Meta raised to hold from underperform at Needham, with analysts citing 'channel checks driving upside to our estimates' and the company's 'strong labor productivity metrics." Labor productivity is driven by a model that is 'globally scaled, doesn't pay for content, is software only, 'free-rides' on mobile devices and has closed loop attribution for advertisers' Cloud monitoring and analytics company Datadog (DD)G) had its highest intraday level since February, after the software solutions company was added to the S&P 500 index effective prior to the opening of trading on July 9, replacing Juniper Networks. Scotiabank analyst says entry into S&P 50 makes the stock a "must-own" and OpenAI's spend is a 'massive net positive' and affirms proves Datadog's differentiation in monitoring the most modern environments
Yahoo
21-06-2025
- Business
- Yahoo
1 AI Super Stock Is Starting to Rebound, but Shares Still Look Cheap
Datadog stock remains more than 35% below the all-time high it reached four years ago. Many organizations are rapidly adopting AI-powered tools, which presents an opportunity for Datadog. The shares are trading near their cheapest price-to-sales ratio ever. 10 stocks we like better than Datadog › The rise of artificial intelligence (AI) is generating plenty of wealth on Wall Street -- and the winners won't be limited to just semiconductor stocks like Nvidia. Tech stocks across several subsectors will benefit, too. Let's take a look at one such stock, Datadog (NASDAQ: DDOG). Between 2019 and 2021, Datadog was one of the hottest names in the stock market. Shares advanced by more than 400% in only three years. However, as the stock market soured on tech stocks and speculative companies in 2022, Datadog shares plummeted. All told, the shares cratered by 68%, erasing the majority of their earlier gains. As of this writing, Datadog stock remains more than 35% off of the all-time high it touched in late 2021. Yet sentiment regarding the stock appears to have shifted. Datadog, which provides cloud monitoring services for enterprises, now boasts strong ratings from the analyst community. According to data compiled by Yahoo! Finance, there are 46 analysts covering Datadog. Of those, 10 rate it as a strong buy, 28 rate it a buy, and eight call it a hold. None of them rate it a sell or strong sell. Moreover, the average 12-month price target for Datadog shares is nearly $139. That's about 9% higher than the stock trades as of this writing. Datadog's business model is to sell monitoring services to organizations with significant cloud assets. This type of monitoring is critical to enterprises today, as operational downtime can result in serious consequences, including lost revenue, customer dissatisfaction, and even legal action. It already serves tens of thousands of clients across a range of industries, including e-commerce, gaming, and finance. While the type of monitoring that Datadog offers isn't new, what it is monitoring is changing. New large language models (LLMs) powered by AI algorithms have become much more important to organizations. Use of these models is rapidly spreading into the day-to-day operations of countless organizations. As this happens, their performance must be monitored, too. That has created a new source of revenue for Datadog, which is helping boost its growth. Consider the company's first-quarter results. Datadog noted that about 8.5% of its total revenue came from AI-native customers. That was up from 3.5% one year earlier -- showing meaningful growth for this new source of revenue. Management also raised its revenue guidance for the year by about $40 million, or 1%, on the back of this fast-growing new source of sales. Ultimately, these figures aren't game changers for Datadog, but they demonstrate that the AI revolution is benefiting the company. If it can continue to deliver on its higher guidance -- or even surpass it -- the stock should respond positively. In part, that's because Datadog's valuation remains near multiyear lows. Though Datadog's stock price has recovered significantly from its 2022 low point, its valuation -- as measured by its price-to-sales (P/S) ratio -- remains near the bottom of its range. As of this writing, Datadog shares trade at a P/S ratio of around 16. That's well below the peak levels above 60 that it reached in 2020 and 2021. It's also far below the stock's average of 28. Granted, a P/S ratio of 16 is still high compared to many stocks -- even within the tech sector. However, for long-term investors who want to establish a position in Datadog shares, it should be comforting that it doesn't appear to be overvalued. The stock appears to be rebounding after a steep decline. The AI revolution is playing a role in that comeback, and the analyst community is moderately bullish on the company's prospects. Finally, its current valuation is well below its long-term average. Overall, that suggests that this could be a good time for long-term investors to buy. Before you buy stock in Datadog, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Datadog and Nvidia. The Motley Fool has a disclosure policy. 1 AI Super Stock Is Starting to Rebound, but Shares Still Look Cheap was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
14-05-2025
- Business
- Globe and Mail
Analysts rate Datadog Inc. a 'Top Pick' with 35% Upside Forecasted
Datadog Inc. (DDOG) Datadog has been identified as a leading investment opportunity, primarily due to its significant advancements within the AI-driven cloud monitoring sector. The company has shown impressive financial performance, reporting a revenue increase of 25% year-over-year, reaching $762 million. This figure not only highlights Datadog's robust growth but also exceeds analyst expectations, reinforcing its position as a market leader. A key factor driving Datadog's positive outlook is its strategic focus on artificial intelligence. As more organizations embrace comprehensive observability solutions to monitor and optimize their IT environments, Datadog's AI-driven capabilities are becoming increasingly relevant and valuable. This positions the company well to capitalize on the ongoing digital transformation trends across various industries. Analysts are notably optimistic about Datadog's future, with an average recommendation rating of 1.49, which leans towards a 'Strong Buy.' Out of 39 brokerage firms covering the stock, 28 have given it a 'Strong Buy' rating, reflecting widespread confidence in the company's growth prospects. Furthermore, Datadog's customer engagement remains strong, evidenced by a dollar-based net retention rate of 110%. This metric indicates that existing customers are not only staying with the platform but are also expanding their spending, a promising indicator of sustained revenue growth. The average target price for Datadog's stock is $153.18, based on projections from 24 analysts. This aligns with Stock Target Advisor's comprehensive analysis, which highlights a strong foundation of positive signals, leading to a 'Very Bullish' overall rating. Despite some recent revisions to earnings estimates suggesting short-term caution, the long-term growth potential of Datadog remains compelling. The company's strategic positioning within the rapidly growing AI and cloud monitoring space, combined with strong customer loyalty and favorable analyst sentiment, underpins the positive investment outlook.
Yahoo
13-05-2025
- Business
- Yahoo
1 Super Stock Down 44% You'll Wish You'd Bought on the Dip, According to Wall Street
Datadog's cloud monitoring platform is used by 30,500 businesses around the world. The company is expanding into AI, and customers are flocking to some of its new products. The stock is down 44% from its 2021 record high, but Wall Street is very bullish on its prospects. 10 stocks we like better than Datadog › Cloud computing is the revolutionary technology that provides businesses with a cost-effective way to shift their operations online. But managing digital infrastructure can be tricky, because websites and online services need to be available 24/7 for customers and employees. That's where Datadog (NASDAQ: DDOG) comes in -- it developed a cloud monitoring platform which helps enterprises minimize downtime and, therefore, lost income. Datadog stock is trading 44% below its record high, which was set during the tech frenzy in 2021. It was unquestionably overvalued then, but the company never stopped expanding, so its stock is actually starting to look attractive at the current level. Wall Street appears to agree. The Wall Street Journal tracks 46 analysts who cover Datadog stock, and most of them have assigned it the highest possible buy rating, with not a single one recommending selling. Here's why investors might want to buy the dip. Datadog had 30,500 customers at the end of the 2025 first quarter (ended March 31), and they operate across a variety of industries including retail, financial services, healthcare, gaming, technology, and more. Cloud monitoring has become essential for all of them, but they use it in unique ways depending on the nature of their business. A retailer, for instance, might use Datadog to monitor its website infrastructure around the clock. It can immediately tell the owner if a certain group of customers is having trouble accessing the online store, so the technical issue can be fixed before it leads to a drop in sales. Similarly, Sony's Playstation Network uses Datadog to monitor infrastructure at all three of its main operations centers in Tokyo, San Diego, and San Francisco, allowing them to pool their resources to resolve outages more quickly. Datadog is now using its expertise to move into the artificial intelligence (AI) industry. It launched a monitoring tool for large language models (LLMs) last year, which helps developers track costs, troubleshoot technical issues, and even evaluate the quality of the outputs produced by each model, so they can make timely adjustments. During Q1, Datadog said the number of customers who were using the LLM Observability product more than doubled compared to six months earlier. The company also launched a monitoring product for businesses that use ready-made LLMs from OpenAI to deploy AI software, instead of developing their own models. The tool helps them track their consumption across the organization, so they can allocate resources more efficiently and create more accurate budgets. Overall, Datadog said 4,000 of its 30,500 customers were using at least one of its AI products in Q1. That number doubled compared to the year-ago period. Datadog generated $762 million in total revenue during Q1 2025. That represented year-over-year growth of 25%, and it was above the high end of management's guidance of $741 million. Chief Financial Officer David Obstler said AI-native customers accounted for 8.5% of the company's total revenue during the quarter. That might not sound like much, but it was more than double the 3.5% contribution it made in the year-ago period. The first-quarter result was so strong that management increased its full-year guidance by $40 million. Datadog is now expected to bring in $3.235 billion in total revenue during 2025 (at the high end of the range), up from $3.195 billion previously. Datadog remained profitable during the quarter despite investing heavily in growth. Its total operating costs grew by 26% year over year to $616 million, led by research and development spending, which accounted for more than half of that total. The company still delivered $0.07 in earnings per share (EPS) on a GAAP (generally accepted accounting principles) basis -- but that was down by 46% from the year-ago period. However, after stripping out one-off and non-cash expenses, Datadog delivered $0.60 in EPS on a non-GAAP basis. That was flat year over year, but it was significantly above the high end of management's forecast of $0.43. The Wall Street Journal tracks 46 analysts who cover Datadog stock, and 29 of them have given it the highest possible buy rating. Eight others are in the overweight (bullish) camp, and the remaining nine recommend holding. Not a single analyst recommends selling. They have an average price target of $137.66 for the stock, which implies a potential upside of 27% over the next 12 to 18 months. However, the Street-high target of $200 suggests the stock could surge by 85% instead. Datadog was trading at an eyewatering price-to-sales (P/S) ratio of over 60 in 2021, which was unsustainable. But the 44% decline in its stock, combined with the company's consistent revenue growth since then, have pushed its P/S ratio down to a more reasonable level of 13.8. That's nearly the cheapest it's been in five years, and is a 54% discount to its average P/S ratio of 30.2 over the same period. Datadog values its addressable market at $53 billion right now in the observability space alone, and expects it to grow at a compound annual rate of 11% until 2028. The company has barely scratched the surface of that opportunity based on its current revenue, which might be why Wall Street is so bullish about the potential of its stock. Plus, the AI revolution is still in its infancy, and it could expand Datadog's opportunity even further over the long term. As a result, it might be a great time to buy the stock considering its current valuation, especially for patient investors who are willing to hold it for the long run. Before you buy stock in Datadog, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy. 1 Super Stock Down 44% You'll Wish You'd Bought on the Dip, According to Wall Street was originally published by The Motley Fool Sign in to access your portfolio
