Analyst resets Datadog stock price target after surprise addition to S&P 500

Shares of Datadog (DDOG) surged simply about 15% to $155.15 on July 3 after S&P World acknowledged the monitoring procedure supplier shall be incorporated in the S&P 500 U.S. inventory index, effective earlier than the market opens on July 9.

The switch greatly stunned some investors, who had anticipated names savor Robinhood (HOOD) or AppLovin (APP) to be next in line.

Datadog will change Juniper Networks (JNPR) , which became true purchased by Hewlett-Packard Challenge Co. (HPE) .

The S&P 500 is a inventory index that tracks the performance of 500 of the main publicly traded firms in the U.S., serving as a key benchmark for the overall health of the U.S. economic system. Tech firms now build up a essential fragment of the index and hang the largest influence on its actions.

Shares may likely rally after being added to a essential index savor the S&P 500 on account of elevated quiz from institutional investors, particularly passive index funds.

DoorDash (DASH) joined the index in March and has risen 20% since. Palantir (PLTR) , which became added closing September, has jumped better than 250% since becoming a member of.

Datadog has lagged in the abet of the broader tech sector this year, falling 5.5% by July 2, while the Nasdaq has obtained 5.6%. The inventory furthermore underperformed the Nasdaq Composite Index in 2024.

Datadog thrives on sturdy AI quiz

New York-based Datadog, based in 2010, went public in 2019. It produces procedure that shows and secures an endeavor's complete know-how infrastructure — along side servers, applications, databases, and security systems.

The firm has benefited from growing into AI. It affords instruments a lot like LLM Observability to help firms video display machine studying units and AI-driven applications in production.

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In Q1 2025, Datadog generated $761.6 million in revenue, a 25% enlarge from a year earlier and sooner than the $741.5 million analysts were anticipating. Adjusted earnings came in at 46 cents per fragment, beating estimates nearer to 43 cents.

The firm raised its paunchy-year revenue forecast to between $3.22 billion and $3.24 billion, up from its earlier range of $3.18 billion to $3.20 billion. Wall Road had been making an are trying to search out round $3.20 billion, fixed with LSEG data pulled by Reuters.

Datadog furthermore gave a 2d-quarter revenue outlook that topped expectations. Its next earnings yarn is anticipated in early August.

Analyst raises Datadog inventory designate blueprint

Wedbush analyst Daniel Ives raised the company's designate blueprint on Datadog to $170 from $140 and reiterated an outperform rating following the info, citing "incremental self perception in the firm to capitalize on its observability initiatives over the approaching years."

Ives acknowledged Datadog's platform "continues to operate momentum inside of the observability space, particularly with AI entrance and center." He expects the firm to operate more market fragment with elevated utilization for its AI cohort across its endeavor potentialities.

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"Datadog’s new merchandise and parts be taught about to counterpoint agentic AI traits following the firm’s fresh partnership with OpenAI," he wrote.

"On the procedure entrance, Datadog remains one of our favourite names to own, and our fresh checks were very sturdy because the AI Revolution takes preserve."

Extra Wall Road Analysts:

• Analysts reboot Olive Backyard parent's inventory designate targets as earnings loom
• Analysts revamp forecast for Nvidia-backed AI inventory
• Intuitive Surgical analyst raises eyebrows with new inventory designate blueprint

Based on TipRanks, the typical 12-month designate blueprint for Datadog is $140.46, fixed with scores from 37 Wall Road analysts. That suggests a shrink back of about 9.5% from the July 3 closing designate of $155.15.

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