Stifel Maintains Hold on Datadog (DDOG) After Mid-Quarter Check

Datadog, Inc. (NASDAQ:DDOG) is one of the AI Stocks in the Spotlight for Investors. On September 12, Stifel analyst Brad Reback reiterated a Hold rating on the stock with a $135.00 price target. The rating follows Datadog’s mid-quarter check in on Thursday.

Consistent with previous meetings, the check in did not provide an intra-quarter consumption update but highlighted CEO Olivier Pomel’s comments on how genAI is changing the way Datadog is researching and productizing new capabilities.

The call also discussed hyperscaler acceleration on Datadog along with AI workload trends monitoring. While Datadog does face certain positives such as core stability and rising hyperscaler commitments, uncertainty regarding OpenAI’s renewal deal demands investor patience and therefore the firm has a hold rating on the stock.

“On Thursday (9/11), Datadog hosted a mid-quarter checkin, and consistent with prior meetings, management did not provide an intraquarter consumption update.That said, the session covered a recent interview with CEO Olivier Pomel, where he discussed how the pace of product development brought by genAI has changed the way Datadog has gone about researching and productizing new capabilities, shifting from a traditional customer led product development motion to a faster paced and slightly more speculative product development strategy.Additional areas discussed on the call included the impact of recent hyperscaler acceleration on Datadog’s growth, as well as trends that Datadog is seeing in monitoring AI workloads.Net/net, while we view the core stability as encouraging and view ramping hyperscaler commitments from genAI vendors as a positive, given the uncertainty on the stock from the OAI renewal, we encourage patience and maintain our Hold rating.”

Datadog, Inc. (NASDAQ:DDOG) offers a cloud-based SaaS platform for monitoring and analytics, specializing in cloud computing and AI-powered cybersecurity products.

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