Datadog (DDOG) Slid on Underwhelming Guidance

Carillon Tower Advisers, an investment management company, released its “Carillon Eagle Mid Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Mid-cap stocks had a challenging first quarter; the Russell Midcap® Growth Index, which was down 7.12%, had greater difficulties than the Russell Midcap® Value Index, which was down 2.11%. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, Carillon Eagle Mid Cap Growth Fund highlighted stocks such as Datadog, Inc. (NASDAQ:DDOG). Datadog, Inc. (NASDAQ:DDOG) is an observability and security platform for cloud applications. The one-month return of Datadog, Inc. (NASDAQ:DDOG) was -1.48%, and its shares lost 24.23% of their value over the last 52 weeks. On April 24, 2025, Datadog, Inc. (NASDAQ:DDOG) stock closed at $99.60 per share with a market capitalization of $34.395 billion.

Carillon Eagle Mid Cap Growth Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q1 2025 investor letter:

"Datadog, Inc. (NASDAQ:DDOG), which helps companies monitor corporate networks and applications, delivered solid results for the quarter, but issued guidance that was underwhelming relative to consensus expectations. We believe that the company is competitively well positioned and has several growth vectors, including expanding its product set to serve security and artificial intelligence use cases. We believe management’s guidance was appropriately cautious in the face of increasing macroeconomic uncertainty."

Datadog, Inc. (NASDAQ:DDOG) is in not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held Datadog, Inc. (NASDAQ:DDOG) at the end of the fourth quarter which was 71 in the previous quarter. While we acknowledge the potential of Datadog, Inc. (NASDAQ:DDOG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered Datadog, Inc. (NASDAQ:DDOG) and shared Aristotle Atlantic Large Cap Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.