DDOG Stock Has Doubled This Year: Analysts Still See Upside, List AI Catalysts

• UBS raised Datadog’s price target to $320 from $280, with a Buy rating.
• The firm sees growth opportunities from AI monitoring demand in 2027. 
• Oppenheimer expects Datadog’s Q3 revenue to exceed Wall Street estimates by more than 4%. 

Datadog Inc. (DDOG) stock has surged 106% this year, but Wall Street analysts see further upside ahead of the company’s third-quarter results. UBS and Oppenheimer raised their price targets, citing AI observability demand and potential OpenAI spending. However, Datadog’s premium valuation remains a key risk for investors. 

Datadog stock edged 0.8% lower in Tuesday’s premarket trading after a nearly 4% gain on Monday. 

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UBS Raises Datadog’s Price Target

Datadog received higher price targets from UBS and Oppenheimer as both firms expressed confidence in the software company's growth prospects. UBS analyst Karl Keirstead raised his price target on Datadog to $320 from $280 and maintained a ‘Buy’ rating, implying 14% upside from the stock’s last closing price. The analyst sees AI-related monitoring services contributing more to the company's growth in 2027.

Keirstead also highlighted possible higher spending from OpenAI during the second half of this year, which could provide an additional boost to Datadog's business. Last week, reports suggested Datadog is looking to expand its cybersecurity business by acquiring cloud security startup Upwind. Upwind makes software that monitors cloud applications, including AI agents. 

However, UBS said Datadog’s stock is expensive compared with its expected growth. The company trades at about 17 times its expected 2027 revenue and 57 times its free cash flow. This means the stock could face pressure if growth misses expectations. 

Oppenheimer Sees Revenue Upside For Datadog

Oppenheimer also raised its DDOG price target to $330 from $300 and reaffirmed an ‘Outperform’ rating, implying 185% upside. The firm expects the company to deliver results that could exceed Wall Street's revenue expectations.

Oppenheimer sees Datadog’s Q3 revenue coming in more than 4% above current consensus estimates. The firm also expressed confidence in Datadog's business and praised management's ability to execute its strategy.

Datadog will report Q3 earnings on Nov. 4. Analysts see $1.14 billion in revenue with earnings of $0.64 per share, according to Fiscal.ai.

DDOG Stock: Retail View 

On Stocktwits, retail sentiment around the stock slipped to ‘bearish’ from ‘neutral’. 

DDOG stock has gained over 77% year-to-date. 

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