Strong AI Boosts Datadog, Inc. (NASDAQ:DDOG) Q1 Results, But BMO Lowers Target on Macro Uncertainty

BMO Capital recently lowered the price target on Datadog, Inc. (NASDAQ:DDOG) to $130 from $152 and kept an Outperform rating on the shares. DDOG provides a monitoring and analytics platform for developers, information technology operations teams, and business users in the cloud in North America and internationally.

The company reported a mostly solid March quarter, highlighted by a roughly 3% beat to the firm's and Wall Street's consensus estimates and strong AI Native contribution to ARR, the analyst tells investors in a research note.

The advisory added that, consistent with its past writings, demand metrics have greater stock/multiple impact than margin and, given the weaker macro backdrop and compressed software valuations, it is lowering its price target.

While disclosing first quarter earnings, the firm provided guidance for Q2 revenue between $787 million and $791 million, representing 22%-23% year-over-year growth, and non-GAAP net income per share between $0.40 and $0.42. For fiscal year 2025, revenue is expected to be in the range of $3.215 billion to $3.235 billion, with an operating income of $625 million to $645 million and non-GAAP net income per share of $1.67 to $1.71. The company raised its full-year revenue guidance by $40 million compared to previous estimates due to strong performance in Q1 and visibility into Q2.

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