Datadog, Inc. (NASDAQ:DDOG) is one of the AI Stocks in Focus on Wall Street. On January 22, Stifel analyst Brad Reback upgraded the stock from Hold to Buy with a price target of $160.00 (from $205.00). The rating upgrade comes ahead Q4 2025 earnings report due on February 10, citing upside surprise potential and attractive long-term valuation.
According to the firm’s recent checks, DDOG is poised to post another larger than typical quarterly beat in Q4, an estimated 4% or more, driven by accelerating core growth, sustained strong gains within the non-OAI genAI cohort, and quarter-over-quarter stability in OpenAI performance.
The net result is we believe DDOG’s 4Q growth rate, excluding OAI, should be >23%.
Looking ahead, Stifel anticipates management to guide calendar year 2026 revenue to an estimated $4.1 billion, implying conservative core growth above 19% excluding OpenAI.
The firm assumed OAI to remain at its current quarterly run rate of about $90 million through 2026, which leads to annual OAI revenue of $360 million compared to an estimated $305 million in 2025.
Stifel also discussed how DDOG has had recent success in S&M efforts and ongoing R&D investments, and that it would be surprised if management guided modestly below current Street expectations (~23%).
Net/net, with shares trading at ~8x CY27E EV/Rev and 30x CY27E EV/FCF, valuation appears relatively attractive for one of the few names we cover with accelerating core growth.
Datadog, Inc. (NASDAQ:DDOG) offers a cloud-based SaaS platform for monitoring and analytics, specializing in cloud computing and AI-powered cybersecurity products.
While we acknowledge the potential of DDOG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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