This software stock has nearly doubled for the year. Bernstein sees even more upside
The investment firm upgraded the stock to outperform from market perform.
TL;DR
- Bernstein upgraded Datadog stock to outperform from market perform.
- The price target was raised to $350 from $237, indicating potential for 42% upside.
- Demand is driven by Datadog's "Born in AI" customer base and new consumer AI agent releases.
- Enterprise token consumption has significantly grown among large AI Labs and smaller "Born in AI" customers.
- Increased engagement with consumer AI agents could drive higher observability requirements for traditional customers.
- The majority of analysts covering Datadog have a buy or strong buy rating.
- A potential downside concern is competition from open source or in-house solutions, particularly as customers mature.
- Datadog shares have increased by approximately 82% year-to-date.