Datadog's (DDOG) Strong Q2 Can't Hide What's Coming: OpenAI May Walk Away

Datadog, Inc. (NASDAQ:DDOG) is one of the 10 AI Stocks Investors Are Watching This Week. On July 8, Guggenheim cut the stock’s rating to “Sell” from Neutral on a target price of $105. The firm has warned that Datadog may suffer a major revenue hit if OpenAI, its biggest customer, moves workloads in-house.

According to the brokerage, OpenAI is building its own log‑management and metrics tools. Provided this becomes true, it may begin eating away at Datadog’s billings in the second half of 2025.

The firm anticipates Datadog to grow 17% in the fourth quarter, which is lower than the 24.6% gain in the current quarter. For 2026, they see only 15% growth in 2026, four points below consensus.

Analysts at the firm highlighted that OpenAI now accounts for an estimated $170 million, or about 60% of Datadog’s “AI‑native” customer cohort. If OpenAI migrates, Datadog would have to deal with “a $150 million or greater…hole to fill in 2026.”

Nevertheless, a strong second quarter, with nearly 25% revenue growth, is still anticipated by the firm. However, this optimism may fade as OpenAI’s optimisation “creates a potential step‑function down” in the second half.

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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