Track market-moving stories before they get noisy

Datadog (DDOG - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Shares of this data analytics and cloud monitoring company have returned +10.6% over the past month versus the Zacks S&P 500 composite's +0.6% change. The Zacks Internet - Software industry, to which Datadog belongs, has gained 5.5% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, Datadog is expected to post earnings of $0.58 per share, indicating a change of +26.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The consensus earnings estimate of $2.41 for the current fiscal year indicates a year-over-year change of +17.6%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $2.88 indicates a change of +19.3% from what Datadog is expected to report a year ago. Over the past month, the estimate has changed -0.4%.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Datadog.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Datadog, the consensus sales estimate for the current quarter of $1.08 billion indicates a year-over-year change of +30.2%. For the current and next fiscal years, $4.34 billion and $5.19 billion estimates indicate +26.6% and +19.7% changes, respectively.

Last Reported Results and Surprise HistoryDatadog reported revenues of $1.01 billion in the last reported quarter, representing a year-over-year change of +32.2%. EPS of $0.6 for the same period compares with $0.46 a year ago.

Compared to the Zacks Consensus Estimate of $956.88 million, the reported revenues represent a surprise of +5.18%. The EPS surprise was +20%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Datadog is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Datadog. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Posted by Defense World Staff on Jul 23rd, 2026

D.A. Davidson & CO. lifted its holdings in shares of Datadog, Inc. (NASDAQ:DDOG – Free Report) by 203.6% in the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm owned 12,052 shares of the company’s stock after buying an additional 8,082 shares during the period. D.A. Davidson & CO.’s holdings in Datadog were worth $1,423,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds have also added to or reduced their stakes in the business. Brighton Jones LLC bought a new position in shares of Datadog in the fourth quarter worth $209,000. Bison Wealth LLC bought a new stake in shares of Datadog during the fourth quarter valued at about $228,000. Empowered Funds LLC lifted its holdings in Datadog by 7.0% in the first quarter. Empowered Funds LLC now owns 10,313 shares of the company’s stock worth $1,023,000 after purchasing an additional 672 shares during the period. Geneos Wealth Management Inc. lifted its holdings in Datadog by 17.6% in the first quarter. Geneos Wealth Management Inc. now owns 769 shares of the company’s stock worth $76,000 after purchasing an additional 115 shares during the period. Finally, Sivia Capital Partners LLC bought a new position in Datadog in the 2nd quarter valued at about $509,000. 78.29% of the stock is owned by institutional investors.

Insiders Place Their Bets In related news, Director Michael James Callahan sold 12,500 shares of the firm’s stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $267.47, for a total value of $3,343,375.00. Following the transaction, the director directly owned 14,996 shares in the company, valued at approximately $4,010,980.12. This trade represents a 45.46% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Alexis Le-Quoc sold 53,912 shares of Datadog stock in a transaction on Wednesday, July 8th. The stock was sold at an average price of $257.24, for a total transaction of $13,868,322.88. Following the completion of the transaction, the chief technology officer owned 509,805 shares in the company, valued at $131,142,238.20. This trade represents a 9.56% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 1,396,309 shares of company stock valued at $317,712,002 in the last three months. Company insiders own 6.48% of the company’s stock.

Analysts Set New Price Targets DDOG has been the topic of several research analyst reports. Capital One Financial raised their target price on shares of Datadog from $217.00 to $268.00 and gave the company an “overweight” rating in a research note on Wednesday, June 17th. Canaccord Genuity Group upped their price target on shares of Datadog from $225.00 to $250.00 and gave the stock a “buy” rating in a research note on Wednesday, June 10th. Cantor Fitzgerald reiterated an “overweight” rating and issued a $226.00 price objective on shares of Datadog in a report on Thursday, June 11th. Wall Street Zen upgraded shares of Datadog from a “hold” rating to a “buy” rating in a research note on Saturday, May 16th. Finally, Wedbush assumed coverage on Datadog in a report on Monday, June 15th. They set a “neutral” rating on the stock. Two research analysts have rated the stock with a Strong Buy rating, thirty-eight have assigned a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, Datadog has an average rating of “Moderate Buy” and a consensus target price of $261.68.

Check Out Our Latest Research Report on Datadog

Datadog Price Performance Shares of DDOG opened at $245.77 on Thursday. The company has a debt-to-equity ratio of 0.25, a quick ratio of 3.40 and a current ratio of 3.40. The firm has a market cap of $87.48 billion, a PE ratio of 646.78, a PEG ratio of 25.91 and a beta of 1.54. The firm’s 50 day moving average price is $239.79 and its 200 day moving average price is $167.23. Datadog, Inc. has a twelve month low of $98.01 and a twelve month high of $278.70.

Datadog (NASDAQ:DDOG – Get Free Report) last posted its earnings results on Thursday, May 7th. The company reported $0.60 EPS for the quarter, topping the consensus estimate of $0.51 by $0.09. The company had revenue of $1.01 billion during the quarter, compared to the consensus estimate of $960.12 million. Datadog had a net margin of 3.69% and a return on equity of 4.83%. The company’s revenue for the quarter was up 32.1% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.46 earnings per share. Datadog has set its FY 2026 guidance at 2.360-2.440 EPS and its Q2 2026 guidance at 0.570-0.590 EPS. As a group, research analysts expect that Datadog, Inc. will post 0.64 EPS for the current fiscal year.

About Datadog (Free Report)

Datadog (NASDAQ: DDOG) is a cloud-based monitoring and observability platform that helps organizations monitor, troubleshoot and secure their applications and infrastructure at scale. Its software-as-a-service offering collects and analyzes metrics, traces and logs from servers, containers, cloud services and applications to provide real-time visibility into system performance and health. Datadog’s platform is widely used by engineering, operations and security teams to reduce downtime, accelerate incident response and improve application reliability.

The company’s product suite includes infrastructure monitoring, application performance monitoring (APM), log management, real user monitoring (RUM), synthetic monitoring and network performance monitoring, along with security-focused products such as security monitoring and cloud SIEM.

Further Reading Five stocks we like better than Datadog Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Small Caps Are Crushing the S&P 500—3 Stocks Still Worth Buying Moog Is More Than a Missile Maker, and Wall Street Is Noticing A Boring Dividend Growth Strategy Becomes a Solid Defensive Play Want to see what other hedge funds are holding DDOG? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Datadog, Inc. (NASDAQ:DDOG – Free Report).

Receive News & Ratings for Datadog Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Datadog and related companies with MarketBeat.com's FREE daily email newsletter.

« PREVIOUS HEADLINEOkta, Inc. $OKTA Position Decreased by California Public Employees Retirement System

Alexis Le-Quoc, co-founder and Chief Technology Officer of Datadog, Inc. (DDOG -3.47%), sold 43,224 shares of Class A Common Stock on July 20, 2026, for a total value of ~$11.5 million, according to an SEC Form 4 filing.

Transaction summaryMetricValueTransaction value$11.5 millionShares sold (direct)43,224Post-transaction shares (total)509,974Post-transaction shares (directly held)509,805Post-transaction shares (indirectly held)169Post-transaction value$134.23 millionTransaction value based on SEC Form 4 weighted average sale price ($265.23); post-transaction value based on July 20, 2026 market close ($263.20).

Key questionsWhat triggered this specific liquidation of equity?
The transaction was part of a structured divestment process governed by a Rule 10b5-1 trading plan adopted on June 13, 2025. This plan facilitated the automatic exercise of 43,224 options and their immediate sale on the open market, providing the executive with liquidity while maintaining a substantial long-term stake in Datadog.How does the current holding compare to historical equity awards?
While the sale involved ~43,000 shares, Alexis Le-Quoc continues to hold a significant portfolio of company equity. This includes 509,805 shares held directly and approximately 8.4 million derivative securities, including vested and unvested awards, held both directly and through the Alexis Le-Quoc Revocable Trust.How has the stock performed relative to the transaction price?
The disposition occurred at a weighted average price of $265.23, while the one-year total return for the stock stood at 81% as of the July 20, 2026 transaction date. Since the trade, the share price settled at $254.79 as of the July 21, 2026 market close.What is the impact on total ownership concentration?
The transaction resulted in an 8% reduction in direct holdings, leaving the insider with a total beneficial interest of 509,974 shares of Class A Common Stock. This remaining position, excluding derivatives, represents an insider ownership percentage of 0.14% and a market valuation of approximately $130 million based on recent trading levels.Company OverviewMetricValueShare Price (as of market close 2026-07-21)$254.79Market Capitalization$87.1 billionRevenue (TTM)$3.7 billionNet Income (TTM)$135.7 millionCompany SnapshotDatadog provides a comprehensive cloud-based Software-as-a-Service (SaaS) platform that delivers infrastructure monitoring, application performance management, log management, and security surveillance capabilities to enterprise customers globally.The company operates on a subscription-based business model, generating recurring revenue from customers who rely on its integrated monitoring and analytics solutions to maintain real-time visibility across their technology infrastructure.Datadog serves developers, IT operations teams, and business stakeholders across North America and internationally, with particular strength in enterprises requiring end-to-end observability and security monitoring solutions.Datadog has established itself as a leading provider of cloud-based observability and security solutions, with a market capitalization of $87.1 billion. The company's integrated platform approach — combining infrastructure monitoring, application performance tracking, log management, and security surveillance — provides a competitive advantage by delivering comprehensive visibility across complex technology environments.

With 8,100 employees and a strong presence in North America and international markets, Datadog continues to benefit from secular trends in cloud adoption and the increasing complexity of distributed systems requiring sophisticated monitoring solutions.

What this transaction means for investorsThe July 20 sale of over 40,000 Datadog shares by its co-founder and CTO Alexis Le-Quoc seems like a substantial disposition. Yet take into account that he retained over 500,000 directly-held shares post-transaction, and another 6.1 million Class B shares held indirectly via the Alexis Le-Quoc Revocable Trust, which can be converted into Class A, and the sale actually represents a small percentage of his equity stake.

In addition, this was a non-discretionary transaction executed as part of a pre-established Rule 10b5-1 plan. Such plans allow insiders to sell shares at predetermined times to avoid concerns of trading on non-public information. Consequently, Le-Quoc’s disposition does not appear to be a cause for investor concern.

Datadog shares are up thanks to strong business performance. In the first quarter, revenue reached $1 billion, representing outstanding 32% growth from the previous year. The company forecasted 2026 full-year sales to rise to $4.3 billion, a significant increase from 2025’s $3.4 billion.

A number of software stocks have had a tough time lately. That could leave some high-profile names primed for a rebound, according to Morgan Stanley.

Key Takeaways PENG stands out with faster revenue and earnings growth, stronger revisions and a cheaper valuation.DDOG posted 32% revenue growth, topped $4 billion in ARR and expanded its AI monitoring platform.PENG trades at 1.45X forward sales versus DDOG's 19.16X and has gained 208.9% year to date. Penguin Solutions, Inc. (PENG - Free Report) and Datadog, Inc. (DDOG - Free Report) are emerging beneficiaries of the AI infrastructure boom, but they represent very different ways to invest in the trend. Penguin provides AI infrastructure, high-performance computing and integrated solutions for deploying large-scale AI workloads, while Datadog delivers the cloud-native monitoring and observability software that enterprises rely on to manage increasingly complex AI applications.

The widespread adoption of AI is driving increased demand for both computing infrastructure and the software required to monitor increasingly complex workloads; consequently, comparing these two stocks has become quite compelling in the current landscape. With spending on AI infrastructure expected to remain robust in the coming years, an opportunity has emerged to profit by investing in one of the market's most attractive long-term growth prospects. But which stock looks more promising right now — PENG or DDOG? Let us delve deeper.

The Case for PENG StockPenguin has evolved into a leading AI infrastructure provider focused on designing, building, deploying and managing AI factories for enterprises, sovereign AI initiatives and neocloud providers. Its AI Factory Platform combines infrastructure software (ClusterWareAI), advanced memory (MemoryAI), compute systems (ComputeAI), reference architectures (OriginAI) and end-to-end managed services, providing customers with an integrated platform across the AI infrastructure stack rather than standalone hardware solutions.

A key competitive advantage is its exposure to production AI inference. Management noted that AI-driven businesses (Integrated Memory and non-hyperscale AI Infrastructure) represented 74% of third-quarter fiscal 2026 revenues and grew 104% year over year, supported by rising demand for agentic AI workloads, expanding backlog and increasing customer adoption. Penguin added four new AI infrastructure customers during the quarter while several previously acquired customers expanded their deployments, strengthening long-term revenue visibility.

Financial momentum remains robust. Third-quarter fiscal 2026 revenues surged 47.6% year over year to a record $478.7 million, operating income climbed to $50.9 million from $9.8 million a year earlier, and GAAP EPS improved to 68 cents from a loss of 1 cent per share. Reflecting strong AI demand, management raised fiscal 2026 guidance to approximately 22% (±2%) revenue growth.

Over the past month, Penguin launched an upgraded ClusterWareAI platform featuring an AI Factory Operations Agent for natural-language infrastructure management and automated GPU remediation, enhancing AI cluster resilience. The company also became an NVIDIA AI Factory Specialized Partner and was recognized as Dell Technologies' Global Alliances Americas AI Partner of the Year, reinforcing its ecosystem credibility and expanding its enterprise AI opportunities.

The Zacks Consensus Estimate for PENG's fiscal 2026 earnings has been revised upward over the past 30 and 60 days to $2.60 per share, indicating strengthening business fundamentals and projected earnings growth of 36.84% year over year.

Image Source: Zacks Investment Research

The Case for DDOG StockDatadog is strengthening its position as an AI infrastructure enabler by expanding beyond observability to deliver integrated monitoring, security and performance optimization for AI applications, GPU clusters and large-scale model training. The company delivered a strong first-quarter 2026, with revenues rising 32% year over year to $1.01 billion, free cash flow of $289 million and more than $4 billion in ARR, reflecting accelerating enterprise adoption.

AI is becoming an increasingly important growth driver. More than 6,500 customers now use one or more AI integrations, representing roughly 80% of Datadog's ARR, demonstrating the growing strategic importance of AI workloads to its business. The company launched GPU Monitoring, MCP Server, Bits AI Security Agent, Bits Assistant and expanded LLM Observability, enabling customers to optimize AI training workloads, improve GPU utilization, accelerate troubleshooting and automate security investigations. Management also highlighted major wins with AI research divisions at two of the world's largest technology companies, reinforcing Datadog's growing role in hyperscale AI infrastructure and AI model training.

Recent developments remain encouraging. Datadog acquired Adaptive ML to strengthen its AI research capabilities in agentic AI and reinforcement learning, supporting future product innovation. At DASH 2026, the company also introduced more than 100 new AI, security and autonomous operations capabilities, further expanding its AI platform and reinforcing its long-term growth strategy.

However, risks remain. Competition is intense across observability, cloud monitoring and AI software, while rapid AI innovation requires continued investment in infrastructure and research. Acquisitions may not deliver the expected synergies and integration benefits, and macroeconomic weakness could pressure enterprise IT spending. Additionally, the fast-evolving AI landscape increases execution, technology and competitive risks.

The Zacks Consensus Estimate for DDOG's full-year 2026 earnings is pegged at $2.41 per share and has remained unchanged over the past 30 and 60 days. The estimate reflects expected year-over-year earnings growth of 17.56%.

Image Source: Zacks Investment Research

Stock Performance: PENG vs. DDOGWhile both PENG and DDOG have generated strong year-to-date returns, Penguin has emerged as the clear outperformer, with shares surging 208.9% versus Datadog's 90.3% gain.

The outperformance reflects growing investor optimism surrounding Penguin's AI Factory Platform strategy, expanding AI infrastructure business and strategic ecosystem partnerships with NVIDIA, SK Telecom, SK Hynix and Dell Technologies. As enterprises scale AI workloads, Penguin's integrated platform for AI infrastructure, memory and managed services has positioned the company to benefit from this long-term growth trend.

Stock Performance (YTD)
Image Source: Zacks Investment Research

Valuation: PENG Is Cheaper Than DDOGPenguin stock looks more attractive than Datadog from a valuation standpoint. Going by the price/sales ratio, PENG’s shares currently trade at 1.45X forward sales, significantly lower than DDOG’s 19.16X. PENG's relatively low valuation multiple suggests meaningful upside potential if the company continues to execute on its AI-driven growth strategy.

PENG vs. DDOG: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

ConclusionWhile both companies are benefiting from the AI infrastructure boom, Penguin stands out with faster revenue and earnings growth, stronger estimate revisions, expanding AI infrastructure deployments and a significantly cheaper valuation.

Backed by strategic AI partnerships and growing exposure to production AI inference, PENG seems a better pick for investors than DDOG right now. While Penguin sports a Zacks Rank #1 (Strong Buy) at present, Datadog has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Olivier Pomel, Chief Executive Officer of Datadog, Inc. (DDOG 0.92%), sold shares of Class A Common Stock on July 13, 2026, according to a recent SEC Form 4 filing.

Transaction summaryMetricValueTransaction value~$32.9 millionShares sold~127,000Post-transaction shares (directly held)~613,000Post-transaction value$159.46 millionTransaction value based on SEC Form 4 weighted average sale price ($259.00); post-transaction value based on July 13, 2026 market close ($260.24).

Key questionsHow does this sale align with recent stock performance?
The sale at $259.00 per share was executed following an 89% one-year total return for the stock as of the July 13, 2026 transaction date.What is the status of the insider’s remaining equity exposure?
Despite the 17% reduction in direct holdings, Pomel maintains significant exposure through ~613,000 directly held shares and approximately 9.0 million derivative securities, which include both vested and unvested awards.To what extent was this transaction discretionary?
The disposition was non-discretionary, as it was governed by a Rule 10b5-1 plan adopted on December 15, 2025, which pre-authorizes trades at specific intervals or price targets to avoid conflicts with material non-public information.Company OverviewMetricValueShare Price (as of market close 2026-07-14)$270.73Market Capitalization$96.3 billionRevenue (TTM)$3.7 billionNet Income (TTM)$135.7 millionCompany SnapshotDatadog provides a comprehensive cloud-based Software-as-a-Service (SaaS) platform that delivers integrated monitoring and analytics solutions, combining infrastructure oversight, application performance tracking, log management, and security surveillance to generate recurring subscription revenue from enterprise customers.The company operates a subscription-based business model where customers pay recurring fees for access to its cloud-native monitoring platform, with revenue derived from per-user pricing, usage-based consumption models, and premium feature tiers across its integrated product suite.Datadog serves developers, IT operations personnel, and business stakeholders across North America and internationally, targeting enterprises and mid-market organizations that require comprehensive observability and monitoring capabilities for their cloud infrastructure and applications.Datadog is a leading cloud-based observability platform with a market capitalization of $96.4 billion and TTM revenue of $3.7 billion, demonstrating significant scale within the software infrastructure monitoring sector. The company's competitive advantage derives from its unified platform approach, which consolidates multiple monitoring functions into a single, integrated solution that reduces operational complexity and vendor fragmentation for enterprise customers. With 8,100 employees and strong year-over-year growth, Datadog maintains a strategic position serving the expanding market demand for comprehensive cloud-native observability and monitoring solutions.

What this transaction means for investorsPomel’s sale of Datadog shares was planned and part of a stock option exercise where he simply took the cash rather than choosing to buy the shares.

Both Pomel’s situation and the recent stock performance may have justified this move. Despite the share exercise, he retains about 613,000 of his company’s shares and around 9.0 million derivative securities, which means he retains considerable holdings in the company.

Moreover, Datadog stock recently reached all-time highs. The stock had surged higher by about 95% over the last year. This occurred as the company hit its first-ever $1 billion revenue quarter in the first quarter of 2026.

Contrary to a narrative about AI hurting the software business, the SaaS stock has actually benefited from AI as the technology increased the need for Datadog’s monitoring software. The fact that revenue increased by 32% yearly in Q1 and grew by 28% in 2025 is evidence of this increased demand.

Today's Change

(

-0.92

%) $

-2.42

Current Price

$

262.04

Ultimately, investors should keep in mind that circumstances surrounding Pomel’s options forced this decision to sell. Hence, they have little reason to believe the move is a reflection on Datadog’s performance.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Datadog. The Motley Fool has a disclosure policy.

Datadog (DDOG - Free Report) closed the most recent trading day at $264.46, moving -2.32% from the previous trading session. This change lagged the S&P 500's daily gain of 0.38%. On the other hand, the Dow registered a gain of 0.29%, and the technology-centric Nasdaq increased by 0.62%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 17.14% outpaced the Computer and Technology sector's loss of 0.53% and the S&P 500's gain of 1.61%.

Market participants will be closely following the financial results of Datadog in its upcoming release. In that report, analysts expect Datadog to post earnings of $0.58 per share. This would mark year-over-year growth of 26.09%. In the meantime, our current consensus estimate forecasts the revenue to be $1.08 billion, indicating a 30.22% growth compared to the corresponding quarter of the prior year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $2.41 per share and a revenue of $4.34 billion, signifying shifts of +17.56% and +26.62%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 5.3% increase. At present, Datadog boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Datadog currently has a Forward P/E ratio of 112.17. This valuation marks a premium compared to its industry average Forward P/E of 19.89.

One should further note that DDOG currently holds a PEG ratio of 7.32. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 1.06 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 92, finds itself in the top 38% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Positioned highest for Ability to Execute among all vendors evaluated July 15, 2026 13:13 ET  | Source: Datadog, Inc.

NEW YORK, July 15, 2026 (GLOBE NEWSWIRE) -- Datadog, Inc. (NASDAQ: DDOG), the leading AI-powered observability and security platform, today announced it has been named a Leader in the Gartner Magic Quadrant for Observability Platforms, 2026. This is the sixth consecutive year Gartner has positioned Datadog as a Leader in the Magic Quadrant.

Datadog was positioned highest in Ability to Execute in the 2026 Gartner® Magic Quadrant™ for Observability Platforms.

"We believe being recognized as a Leader for the sixth consecutive year reflects the depth of investment Datadog has made in helping teams navigate the complexity of building AI- and LLM-powered applications,” said Yanbing Li, Chief Product Officer at Datadog. “Datadog invests more than $1 billion in R&D (non-GAAP) annually — from contributions to OpenTelemetry and OpenLineage to the capabilities we ship every day — because our customers need answers, not more complexity."

“Datadog gives our teams real-time visibility into how customers experience our products, allowing us to identify and resolve issues before they impact end users,” said Daniel Perschonok, VP of Cloud, Data, & Security Services at Experian Consumer Services. “When we launched our AI chatbot, EVA, LLM Observability provided immediate insight into model performance and customer interactions, helping us deliver a stable, high-quality AI experience from day one.”

Customer feedback is vital to Datadog’s product innovation. Below are some recent reviews of Datadog, a 2025 Gartner Peer Insights™ Customers' Choice for Observability Platforms, from the company’s profile on Gartner Peer Insights™:

“As an APM user, I have found Bits AI to be a significant improvement for troubleshooting and debugging,” said an IT associate at an IT services company. “In the past, effective debugging often required deep knowledge of the application and extensive experience investigating issues. Bits AI has made the process much easier by helping identify potential root causes and guiding the investigation more efficiently.”

“Datadog has been a game changer for us as we moved from a diversified set of products to a single unified platform for all of our observability needs,” said a software developer at a healthcare and biotech company. “We are better, faster and more aligned as a technology org throughout the entire development lifecycle and beyond.”

“Datadog has been a fantastic partner,” said a director of IT at a travel and hospitality company. “The product has become more useful every year and with the age of AI, we are seeing more useful features being introduced almost monthly. We also appreciate that the account team is very engaged with the enterprise and the product engineering team turns around feedback quickly.”

Datadog's unified observability and security platform breaks down organizational silos and enables IT operations, development, security, and business teams to collaborate more effectively and take action based on a single source of truth.

Bits Investigation autonomously investigates alerts, surfaces root cause, and recommends and takes action across systems, accelerating incident response and reducing outages.Agent Observability provides visibility into the performance, quality, security, and cost of AI agents and LLM apps, enabling safe and scalable adoption of AI-native workloads.End-to-end APM reduces mean time to resolution by connecting mobile and browser apps with backend services, providing deep visibility into every user action, line of code, and database query.Digital Experience Monitoring gives organizations complete visibility into how customers experience their mobile and web digital products and uniquely ties those experiences to backend systems and business outcomes. The full report is now available for download here: https://www.datadoghq.com/resources/gartner-magic-quadrant-observability-platforms-2026/.

Gartner disclaimer
Gartner, Magic Quadrant for Observability Platforms, Padraig Byrne, Martin Caren, D.B. Cummings, Neil Young, 13 July 2026 

Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner’s business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, including any warranties of merchantability or fitness for a particular purpose.

This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Datadog.

GARTNER is a trademark of Gartner, Inc. and/or its affiliates. Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates and is used herein with permission. All rights reserved.

Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences with the vendors listed on the platform, should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates.

About Datadog

Datadog is the leading observability and security platform for the AI era, providing businesses with unified visibility across the technology stack to manage complexity at scale. It brings applications, infrastructure, data, models, and security into one place, using AI to detect and resolve issues before they impact customers. Trusted globally by Fortune 500 companies and high-growth AI leaders, Datadog enables businesses to move faster with clarity and confidence.

Forward-Looking Statements

This press release may include certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended including statements on the benefits of new products and features. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control, including those risks detailed under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on February 18, 2026, as well as future filings and reports by us. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.

Contact:
[email protected]

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Datadog (DDOG - Free Report) Datadog is a monitoring and analytics platform for developers, IT operations teams and business users in the cloud age. The company's business runs around its portfolio of over 1,000 out-of-the-box integrations including public cloud, private cloud, on-premise hardware, databases and third-party software.

DDOG is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. DDOG has a Growth Style Score of A, forecasting year-over-year earnings growth of 17.6% for the current fiscal year.

For fiscal 2026, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.05 to $2.41 per share. DDOG boasts an average earnings surprise of +15.4%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DDOG should be on investors' short list.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Datadog (DDOG - Free Report) .

Datadog currently has an average brokerage recommendation (ABR) of 1.25, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 44 brokerage firms. An ABR of 1.25 approximates between Strong Buy and Buy.

Of the 44 recommendations that derive the current ABR, 38 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 86.4% and 6.8% of all recommendations.

Brokerage Recommendation Trends for DDOG

Check price target & stock forecast for Datadog here>>>

While the ABR calls for buying Datadog, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.

On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in DDOG?Looking at the earnings estimate revisions for Datadog, the Zacks Consensus Estimate for the current year has increased 5.3% over the past month to $2.41.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Datadog. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for Datadog may serve as a useful guide for investors.

Key Takeaways Datadog topped $1 billion in quarterly revenues as first-quarter 2026 sales rose 32% year over year.DDOG unveiled 100 plus AI and security capabilities and acquired Adaptive ML to expand AI agents.Datadog forecasts 2026 revenues of $4.30-$4.34B despite margin, competition and macro risks. Datadog (DDOG - Free Report) shares have surged 88.7% year to date, comfortably outpacing the Zacks Computer and Technology sector's 14.8% growth and the Zacks Internet Software industry's 8% decline over the same stretch of trading.

The rally reflects growing investor confidence in Datadog's role as a core observability and security platform for enterprises navigating increasingly complex, AI-driven infrastructure. With first-quarter 2026 results confirming accelerating growth and management issuing upbeat forward guidance, the near-term setup still looks favorable for investors willing to ride out some volatility, even as rising costs and intensifying competition warrant a genuinely watchful eye.

DDOG Outperforms Sector, Peers YTD
Image Source: Zacks Investment Research

Catalysts Fuelling DDOG’s RallyDatadog's first-quarter 2026 results showed revenues climbing 32% year over year to $1,006 million, marking the company's first quarter above $1 billion and a sequential acceleration from 29% growth in the prior period. Customers with annual recurring revenues of $100,000 or more grew 21% year over year to about 4,550. Non-GAAP operating margin held at 22%, while free cash flow reached $289 million.

Momentum has continued into the current quarter. Last month, Datadog hosted its DASH 2026 conference, unveiling more than 100 new capabilities to help customers manage growing AI and security complexity, including expanded agentic tooling. On June 30, the company announced its acquisition of Adaptive ML, a startup building a Reinforcement Learning Operations platform, which will join Datadog AI Research to accelerate work on specialized AI agents trained on real-world observability signals. The company also achieved FedRAMP High certification during the quarter and launched GPU Monitoring to help customers better manage AI infrastructure spend.

Forward-Looking Guidance by DDOG Holds PromiseFor the second quarter of 2026, Datadog guided revenues between $1.07 billion and $1.08 billion, non-GAAP operating income to be $225-$235 million, and non-GAAP earnings per share between 57 cents and 59 cents.

The Zacks Consensus Estimate calls for 2026 revenues of $4.34 billion, up 26.62% year over year, with earnings pegged at $2.41 per share, up 17.56%, suggesting the current valuation gap is arguably well justified by Datadog's faster, AI-driven observability growth trajectory relative to the broader field.

For full-year 2026, management projected revenues between $4.30 billion and $4.34 billion, non-GAAP operating income to be $940-$980 million, and non-GAAP earnings per share between $2.36 and $2.44, underscoring continued confidence in sustained double-digit growth.

Headwinds Worth MonitoringDespite the strong trajectory, risks remain. GAAP operating margin was just 1% in the quarter, reflecting heavy stock-based compensation and continued R&D investment, including newly absorbed costs tied to the Adaptive ML deal. Continued reliance on large enterprise deals also introduces some lumpiness to quarterly bookings, and management has flagged macro uncertainty tied to trade policy and IT spending as ongoing watch items.

Valuation and Competitive LandscapeDatadog carries a Zacks Value Score of F, trading at a forward 12-month price-to-sales ratio of 19.2X, well above the industry median of 4.78X. That steep premium reflects Datadog's notably stronger growth profile relative to slower-growing peers, whose more modest multiples mirror decelerating or largely flat expansion.

DDOG’s P/S Valuation
Image Source: Zacks Investment Research

DDOG faces significant competition from the likes of International Business Machines (IBM - Free Report) , Cisco Systems (CSCO - Free Report) and Dynatrace Software (DT - Free Report) , among others. Cisco Systems has advanced 45.2%, while Dynatrace has gained 4.1% and International Business Machines has returned 3.4%, highlighting Datadog's clear outperformance against all three legacy and pure-play rivals alike.

Cisco Systems leans on its deep network-layer footprint and hardware relationships to push observability bundles into existing accounts, while Dynatrace differentiates through AI-driven causal analytics aimed squarely at large enterprise customers. International Business Machines folds observability into its broader hybrid-cloud and consulting stack, giving it reach but comparatively less focus. Datadog's unified platform keeps winning share, though Cisco Systems, Dynatrace, and International Business Machines each retain entrenched enterprise relationships that keep the observability and security market intensely contested heading into the second half of 2026.

ConclusionWith accelerating revenue growth, robust guidance and steady AI-driven innovation spanning GPU monitoring, agentic security tooling and the Adaptive ML acquisition, Datadog's growth story remains firmly intact. Despite thin GAAP margins and a crowded competitive field, the near-term outlook still tilts favorably enough for patient, growth-oriented investors to consider Datadog.

DDOG currently carries a Zacks Rank #2 (Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity per the Zacks proprietary methodology. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Datadog (DDOG - Free Report) , a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Datadog currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for DDOG that show why this data analytics and cloud monitoring company shows promise as a solid momentum pick.

A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For DDOG, shares are up 8.59% over the past week while the Zacks Internet - Software industry is up 4.62% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 10.23% compares favorably with the industry's 2.97% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Datadog have risen 131.99%, and are up 67.56% in the last year. On the other hand, the S&P 500 has only moved 14.34% and 21.46%, respectively.

Investors should also pay attention to DDOG's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. DDOG is currently averaging 4,265,776 shares for the last 20 days.

Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with DDOG.

Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost DDOG's consensus estimate, increasing from $2.28 to $2.41 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom LineGiven these factors, it shouldn't be surprising that DDOG is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Datadog on your short list.

U.S. stock futures were higher this morning, with the Nasdaq 100 futures gaining around 1% on Monday.

Shares of Datadog Inc (NASDAQ:DDOG) fell sharply in pre-market trading.

Bernstein analyst Peter Weed downgraded Datadog from Outperform to Market Perform and raised the price target from $180 to $226.

Datadog shares fell 2.8% to $253.00 in pre-market trading.

Here are some other stocks moving lower in pre-market trading.

Photo via Shutterstock

Market News and Data brought to you by Benzinga APIs

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

To add Benzinga News as your preferred source on Google, click here.

Key Takeaways Datadog acquired Adaptive ML to add RLOps technology to its AI Research for specialized AI models.DDOG topped $1B in Q1 2026 revenue as AI cohorts helped drive customer and bookings growth.Datadog raised full-year 2026 revenue guidance after expanding AI capabilities and research investment. Datadog (DDOG - Free Report) is deepening its bet on artificial intelligence with the acquisition of Adaptive ML, a startup building what the company describes as the world's first Reinforcement Learning Operations (RLOps) platform. Announced on June 30, 2026, the deal brings Adaptive ML into Datadog AI Research, the company's dedicated lab for advancing world models and agentic large language model post-training. The move gives enterprises using Datadog's platform a new pathway to build, own, and continuously improve their own specialized AI agents and models.

The acquisition builds on momentum from Datadog's June 9, 2026, announcement of over 100 new capabilities aimed at helping customers manage AI and security complexity, and follows the company's FedRAMP High certification for its government offering earlier this year. By folding Adaptive ML's RLOps technology into its research arm, Datadog is positioning observability data as fuel for training specialized AI agents, extending its dual strategy of applying AI internally while building end-to-end observability for customers' AI stacks.

The strategic logic is backed by solid underlying performance. Datadog's first-quarter 2026 results, released on May 7, 2026, showed revenues climbing 32% year over year to $1,006 million, its first quarter above the $1 billion mark. The customer base generating at least $100,000 in annual recurring revenue grew to roughly 4,550, up from about 3,770 a year earlier, while new logo annualized bookings set an all-time record. Management noted that AI-related cohorts drove much of this acceleration, with about 20% of customers, representing 80% of ARR, now using AI integrations.

Looking ahead, Datadog guided second-quarter 2026 revenues to $1.07-$1.08 billion, implying 29-31% year-over-year growth, with non-GAAP operating income of $225-$235 million. For the full fiscal year, the company raised its outlook to $4.3-$4.34 billion in revenues, indicating 25-27% growth, with non-GAAP earnings per share projected between $2.36 and $2.44. With R&D investment exceeding $1 billion annually, the Adaptive ML deal reinforces Datadog's intent to convert expanding AI research capacity into durable product differentiation.

How Competitors Compare on AI-Driven ObservabilityDatadog's push into RLOps places it alongside Dynatrace (DT - Free Report) and Elastic (ESTC - Free Report) in the race to embed AI deeper into observability platforms. Dynatrace has centered its strategy on its Davis AI engine, pairing causal and generative AI to automate root-cause analysis across enterprise environments. Elastic, meanwhile, has focused on integrating AI-driven search and vector database capabilities into its observability and security offerings. While Dynatrace emphasizes automation for large enterprises and Elastic leans on open, search-based architecture, neither Dynatrace nor Elastic has announced an RLOps-specific acquisition comparable to Datadog's move with Adaptive ML.

DDOG’s Price Performance, Valuation & EstimatesShares of Datadog have appreciated 91.5% year to date, outperforming the Zacks Computer and Technology sector’s return of 18.3%.

DDOG Stock’s Price Performance
Image Source: Zacks Investment Research

Datadog is trading at a forward 12-month price-to-sales multiple of 19.45 compared with the broader Zacks Internet - Software industry’s multiple of 3.66, suggesting a stretched valuation. DDOG carries a Value Score of F.

DDOG’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for DDOG’s 2026 earnings is pegged at $2.41 per share, indicating a 17.56% increase from 2025’s reported figure.

Datadog currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Adaptive ML will join Datadog’s AI lab to build frontier AI infrastructure to address cutting-edge research challenges within observability and security June 30, 2026 16:05 ET  | Source: Datadog, Inc.

NEW YORK, June 30, 2026 (GLOBE NEWSWIRE) -- Datadog, Inc. (NASDAQ: DDOG), the leading AI-powered observability and security platform, today announced it has acquired Adaptive ML, a frontier AI startup developing the world's first Reinforcement Learning Operations (RLOps) platform, enabling enterprises to build, own, and deploy their own specialized agents and models.

Adaptive ML will join Datadog AI Research, accelerating Datadog’s investment and research efforts around world models and agentic LLM post-training for observability. Datadog AI Research focuses on fundamental technical problems and collaborates with Datadog's product and engineering teams to translate research advances into products.

“We started Adaptive to give every enterprise the ability to perpetually improve its own AI. The missing piece was never the algorithm, the hardest part was production scale. With Datadog, and the continuous stream of real-world signals that only a platform operating at this unique reach can provide, we will work directly from the foundation that intelligent agents need to drive exponential productivity gains, reliably and consistently. With Datadog’s unmatched access to real-world infrastructure, we can accelerate towards continuous intelligence,” said Julien Launay, co-founder and CEO, Adaptive ML.

“Our lab is focused on leveraging our data and domain expertise to build specialized agents and models, and to effectively turn our data into first-party intelligence. As we continue to bolster our R&D efforts and better serve our customers, bringing Adaptive ML on board is a natural fit to enhance and augment the work we are already doing within our lab,” said Ameet Talwalkar, Datadog's Chief Scientist.

As AI continues to intensify the level of complexity software systems are facing on a daily basis, Datadog has invested over $1B in R&D annually — significantly contributing to the end-to-end observability and security solutions it has delivered to customers. Recently, that includes research initiatives like Toto 2.0, as well as products like Bits Investigation, Bits Code, and Bits Security Analyst, which have already conducted hundreds of thousands of investigations on behalf of customers.

About Datadog
Datadog is the leading observability and security platform for the AI era, providing businesses with unified visibility across the technology stack to manage complexity at scale. It brings applications, infrastructure, data, models, and security into one place, using AI to detect and resolve issues before they impact customers. Trusted globally by Fortune 500 companies and high-growth AI leaders, Datadog enables businesses to move faster with clarity and confidence.

Forward-Looking Statements
This press release may include certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended including statements on the benefits of new products and features. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control, including those risks detailed under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2026, as well as future filings and reports by us. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.

Contact

[email protected]

A single fake error report hijacked Claude Code in controlled testing — the agent ran the attacker's code with the developer's full privileges, and not one alert fired. EDR, WAF, IAM, and the firewall all missed it completely.

Datadog (DDOG - Free Report) closed at $222.75 in the latest trading session, marking a -1.71% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 1.09%. Meanwhile, the Dow experienced a rise of 0.14%, and the technology-dominated Nasdaq saw an increase of 1.91%.

Prior to today's trading, shares of the data analytics and cloud monitoring company had gained 6.78% outpaced the Computer and Technology sector's gain of 0.22% and the S&P 500's gain of 0.29%.

Investors will be eagerly watching for the performance of Datadog in its upcoming earnings disclosure. In that report, analysts expect Datadog to post earnings of $0.57 per share. This would mark year-over-year growth of 23.91%. Meanwhile, our latest consensus estimate is calling for revenue of $1.08 billion, up 30.22% from the prior-year quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $2.39 per share and a revenue of $4.31 billion, signifying shifts of +16.59% and +25.71%, respectively, from the last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Datadog. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Datadog is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Datadog has a Forward P/E ratio of 94.97 right now. This indicates a premium in contrast to its industry's Forward P/E of 18.05.

Meanwhile, DDOG's PEG ratio is currently 6.19. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Software industry had an average PEG ratio of 1 as trading concluded yesterday.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 84, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

Datadog (DDOG - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Shares of this data analytics and cloud monitoring company have returned +11.6% over the past month versus the Zacks S&P 500 composite's +2.1% change. The Zacks Internet - Software industry, to which Datadog belongs, has gained 2.7% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

Datadog is expected to post earnings of $0.57 per share for the current quarter, representing a year-over-year change of +23.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of $2.39 points to a change of +16.6% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $2.81 indicates a change of +17.8% from what Datadog is expected to report a year ago. Over the past month, the estimate has changed +0.2%.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Datadog.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Datadog, the consensus sales estimate of $1.08 billion for the current quarter points to a year-over-year change of +30.2%. The $4.31 billion and $5.16 billion estimates for the current and next fiscal years indicate changes of +25.7% and +19.7%, respectively.

Last Reported Results and Surprise HistoryDatadog reported revenues of $1.01 billion in the last reported quarter, representing a year-over-year change of +32.2%. EPS of $0.6 for the same period compares with $0.46 a year ago.

Compared to the Zacks Consensus Estimate of $956.88 million, the reported revenues represent a surprise of +5.18%. The EPS surprise was +20%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Datadog is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Datadog. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades, downgrades and initiations, please see our analyst ratings page.

Considering buying DDOG stock? Here’s what analysts think:

Photo via Shutterstock

Market News and Data brought to you by Benzinga APIs

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

To add Benzinga News as your preferred source on Google, click here.

Key Takeaways Datadog's GPU Monitoring extends AI observability into GPU performance, utilization and efficiency.DDOG serves 6,500 customers using AI integrations, representing roughly 80% of annual recurring revenue.Datadog won AI-related deals with major research organizations using GPU Monitoring at scale. Datadog’s (DDOG - Free Report) expanding AI opportunity is increasingly tied to its ability to become a critical observability layer for AI infrastructure. GPU Monitoring strengthens that position by extending Datadog's platform deeper into one of the most expensive and performance-sensitive components of AI deployments. As enterprises and AI-native companies scale training and inference workloads, monitoring GPU utilization, efficiency, and performance is becoming essential to controlling costs and maximizing returns on AI investments.

The strategic significance lies in GPU Monitoring's integration within Datadog's broader AI observability stack. Rather than offering a standalone monitoring tool, Datadog connects GPU telemetry with application performance, infrastructure monitoring, LLM observability and workflow analytics. This unified approach is likely to increase platform adoption among AI customers while creating additional cross-sell opportunities across its expanding product portfolio. Datadog serves over 6,500 customers using one or more AI integrations, representing roughly 80% of annual recurring revenue, highlighting how AI-related workloads are becoming increasingly central to growth.

Early customer wins indicate that GPU Monitoring is already resonating with large-scale AI deployments. In the first quarter of fiscal 2026, Datadog secured significant AI-related contracts supporting some of the world's largest AI research organizations, where GPU Monitoring is helping optimize hyperscale training environments. The pace at which this demand scales beyond a concentrated set of frontier customers, however, remains a variable to watch.

The first-quarter 2026 revenues increased 32% year over year to $1.01 billion, while customers with annual recurring revenue above $100,000 grew 21% to 4,550. DDOG has raised its full-year 2026 revenue guidance to $4.30-$4.34 billion, indicating 25%-27% year-over-year growth. The Zacks Consensus Estimate for DDOG's 2026 revenues is pegged at $4.31 billion, indicating 25.71% year-over-year growth, suggesting GPU Monitoring could become an increasingly meaningful contributor to Datadog's AI revenue opportunity.

Datadog Faces Stiff CompetitionDatadog faces stiff competition from Dynatrace (DT - Free Report) and Cisco Systems (CSCO - Free Report) in the GPU monitoring space. Cisco Systems, through its Splunk platform, offers GPU visibility as part of its AI-Ready POD infrastructure stack, while Dynatrace provides GPU and TPU telemetry within its broader AI observability suite.

However, both Cisco Systems and Dynatrace approach GPU monitoring as a bolt-on extension of existing tooling rather than a purpose-built, fleet-level solution with integrated cost attribution and cross-sell architecture at its core. Datadog's unified approach, connecting GPU telemetry directly with LLM observability and application performance monitoring, represents a structurally deeper proposition than what either Dynatrace or Cisco currently offers in this specific domain.

DDOG’s Price Performance, Valuation & EstimatesShares of Datadog have appreciated 72.3% year to date, outperforming the Zacks Computer and Technology sector’s return of 13.2%.

DDOG Stock’s Price Performance
Image Source: Zacks Investment Research

Datadog is trading at a forward 12-month price-to-sales multiple of 17.79 compared with the broader sector’s multiple of 6.39, suggesting a stretched valuation. DDOG carries a Value Score of F.

DDOG’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for DDOG’s 2026 earnings is pegged at $2.39 per share, up by 4 cents over the past 30 days, indicating a 16.59% increase from 2025’s reported figure.   

Datadog currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2 Software Stocks Turning AI Fears Into Fundamental GainsDatadog NASDAQ: DDOG co-founder and CEO Olivier said the company has seen business acceleration over the past several quarters, with growth coming from a broad set of customers rather than a single account or segment.

Speaking at a Bernstein event with Senior Analyst Peter Weed, Olivier said the company is seeing increased demand from “AI natives,” including newer companies built around artificial intelligence and businesses developing key AI infrastructure. But he said the more notable trend is that acceleration is also occurring outside that group, including among older cloud-native companies and larger enterprises.

Get Datadog alerts:

Datadog Soars, Dynatrace Slumps: Gap Widens in AI Agent Stocks“What’s the most exciting to us is that it is not a specific customer, a specific set of customers, a specific side of the business,” Olivier said. “We’ve really seen acceleration across the board.”

AI Growth Adds to Existing Observability Demand Olivier said AI companies are consuming large amounts of infrastructure and running more applications, which is driving demand for Datadog’s traditional observability tools. He also pointed to rising use of Datadog’s AI-specific products, including traffic to MCP services and traces flowing into its LLM Observability product.

The AI Fear Around Datadog Stock May Have Been Completely WrongAsked where Datadog’s long-term value comes from, Olivier said the company helps customers manage the complexity created as they ship more applications. He argued that as developers become more productive — from higher-level programming languages to cloud, SaaS and now coding agents — the resulting systems become harder to understand and operate.

“That increase of productivity creates a dramatic increase in complexity,” he said. “The problem we solve for our customers is we actually understand that complexity, we manage it for them.”

Olivier pushed back on the idea that general-purpose AI models could replace observability software. He said Datadog handles much larger volumes of data than are typically placed into large language models and must operate in near real time. He compared the distinction to asking an AI chatbot for driving advice versus relying on a real-time self-driving system to operate a car.

CEO Says Build-It-Yourself Approach Often Lacks Economic Logic Olivier also addressed the argument that companies could use AI coding tools or open-source software to build their own observability systems. He said Datadog provides leverage because a dollar spent on Datadog typically sits alongside much larger spending on cloud infrastructure and engineering teams.

He said customers often spend $10 to $20 with their cloud provider and $20 to $100 on engineering for every dollar spent with Datadog. In that context, he said, using Datadog to optimize infrastructure, engineering and AI model spending “doesn’t make economic sense” to replicate internally.

He cited hyperscalers adopting Datadog products for development and training of AI models as an example, saying these are companies that culturally tend to build internally and avoid commercial software.

Product-Led Model Remains Central Olivier described Datadog’s business as built around bottom-up product adoption, with tools typically first adopted by the people doing the technical work. He said the company emphasizes a unified platform, replatforms acquired products and relies largely on usage-based pricing.

That model, he said, gives Datadog clearer signals about what customers find valuable and allows the company to expand its product footprint efficiently. Olivier said Datadog spends about 30% of revenue on research and development, supported by what he described as a more efficient go-to-market model than typical enterprise software businesses.

While Datadog has an enterprise sales organization, Olivier said its motion remains bottom-up inside large companies. He said enterprise customers often start with relatively small annualized deals in the mid-five-figure to low-six-figure range and grow over time.

Security, AI Agents and Automation Seen as Expansion Areas Olivier said security is a natural extension of Datadog’s platform because development, operations and security teams increasingly need to work together. He said many of the signals needed to secure an application are already present in observability data, including production behavior, code changes, testing environments, user behavior and developer activity.

On AI, Olivier distinguished between “Datadog for AI,” which observes AI components used by customers, and “AI for Datadog,” which applies AI to automate more of the application lifecycle.

He highlighted Datadog’s Bits AI SRE agent and Bits AI security agent, which he said can run investigations and reduce the time spent responding to outages or security alerts. In one example, he said an AI agent could identify an incident, suggest the people who know how to fix it and propose a fix within minutes, reducing the need for long incident-response calls.

Olivier also discussed Toto, a time-series model trained largely on observability data. He said the model generalizes to other time-series domains and is part of Datadog’s broader effort to put specialized intelligence closer to the data plane for real-time automation.

Bring Your Own Cloud Addresses Data and Cost Needs Datadog is also expanding deployment flexibility through Bring Your Own Cloud options, Olivier said. The approach allows customers to store data on infrastructure they manage while Datadog continues to run and update the application.

He said the demand is driven by several factors, including cost at large scale, data residency laws, existing data center capacity and cloud provider commitments. Olivier said Datadog historically avoided on-premises deployments because they could slow innovation, but said the Bring Your Own Cloud model allows the company to retain product iteration while giving customers more control over data infrastructure.

Looking ahead, Olivier said AI is increasing the amount of software, infrastructure and complexity that companies must operate. He said that dynamic supports both newer AI-specific opportunities and Datadog’s core observability business, where he said the company has less than 14% share of a market that continues to grow.

About Datadog NASDAQ: DDOGDatadog NASDAQ: DDOG is a cloud-based monitoring and observability platform that helps organizations monitor, troubleshoot and secure their applications and infrastructure at scale. Its software-as-a-service offering collects and analyzes metrics, traces and logs from servers, containers, cloud services and applications to provide real-time visibility into system performance and health. Datadog's platform is widely used by engineering, operations and security teams to reduce downtime, accelerate incident response and improve application reliability.

The company's product suite includes infrastructure monitoring, application performance monitoring (APM), log management, real user monitoring (RUM), synthetic monitoring and network performance monitoring, along with security-focused products such as security monitoring and cloud SIEM.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

Should You Invest $1,000 in Datadog Right Now?Before you consider Datadog, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Datadog wasn't on the list.

While Datadog currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Click the link to see MarketBeat's list of seven stocks and why their long-term outlooks are very promising.

Get This Free Report

On May 29, 2026, Datadog Inc (DDOG) shares rose 10.0% to a current price of $247.69, showcasing a significant increase in momentum. The stock has seen a remarka

May was a big month for the technology sector. The Technology Select Sector SPDR Fund NYSEARCA: XLK, a commonly used proxy for the industry’s performance, delivered a total return of 19.8%. This was barely below the 20% gain the fund put up in April, as investors strongly bid up many stocks within the AI trade.

Three stocks did particularly well and received high praise from the analyst community—topping MarketBeat’s list of the most upgraded stocks in May. Unsurprisingly, all three are in the tech sector, including two prominent software companies.

Get Snowflake alerts:

Datadog Blasts off, Receiving Over 30 Upgrades in MayObservability software provider Datadog NASDAQ: DDOG ties for first as MarketBeat’s most upgraded stock in May, receiving a whopping 32 upgrades from analysts. Datadog’s software is becoming increasingly important as agentic AI starts to move into the mainstream. It helps companies monitor their AI agents and address issues with their performance.

Datadog Today

$230.82 -3.43 (-1.46%)

As of 12:21 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$98.01▼

$278.70P/E Ratio609.52

Price Target$231.64

Datadog shares absolutely exploded after the company’s Q1 2026 earnings report, shooting up by 31% in a single session.

This came as the firm handily beat expectations on sales and adjusted earnings per share (EPS) and substantially increased its guidance for the full year. It now expects to generate full-year sales of between $4.32 billion at the midpoint, which represents growth of around 25% year-over-year (YOY).

Datadog also received FedRAMP High certification, which allows it to move forward with U.S. federal government customers that handle highly sensitive workloads. Overall, Datadog shares rose 87.1% in May, the stock’s best monthly return ever.

Despite receiving a plethora of upgrades, the MarketBeat consensus price target of approximately $220 implies around 20% downside in shares. The average of targets updated after its report is only slightly higher at $225. However, the vast majority of analysts continue to have a Buy rating on the stock. Datadog’s 41 Buy ratings stand in stark contrast to its just two Sell ratings and one Hold rating.

Marvell Continues Strong Performance From April, Ups GuidanceMarvell Technology NASDAQ: MRVL was also a huge winner in May, and tied with Datadog for the top spot, receiving 32 analyst upgrades. Overall, shares gained by 24% in May after coming off of a 67% gain in April. There wasn’t a specific catalyst in May that allowed for Marvell’s strong performance. Rather, the stock really benefited from strength in the AI hardware trade, being a supplier of custom chips and networking solutions.

Marvell Technology Today

MRVL

Marvell Technology

$283.90 +3.19 (+1.14%)

As of 12:21 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$61.44▼

$324.20Dividend Yield0.08%

P/E Ratio96.49

Price Target$224.68

Marvell’s Q1 fiscal 2027 (FY2027) earnings report in late May saw the firm post a slight beat on sales and in-line adjusted earnings per share (EPS). Note that the firm’s fiscal reporting period is several quarters ahead of the calendar period. However, the company raised its guidance substantially, by $500 million for FY2027 and by $1.5 billion in FY2028. It expects sales of $11.5 billion and $16.5 billion in these years, respectively.

Notably, shares rose by just 3% after this report. Investors seemed to have anticipated the strong guidance Marvell would post, bidding up shares earlier in the month.

The MarketBeat consensus price target on Marvell sits near $212, implying a notable downside in shares. The average of targets updated after the company’s report is substantially higher at $236—better, but still implying downside, a reflection of the recent surge in shares following an announcement from NVIDIA NASDAQ: NVDA CEO Jensen Huang that thrust Marvell into the spotlight. In terms of ratings, Marvell has 31 Buys, six Holds, and zero Sells.

Snowflake Ends May With a 36% Surge, Gains Over 80% in the MonthLast up is Snowflake NYSE: SNOW—another key player in the AI software space. The stock received 28 upgrades in May, shooting up 87% during the month, good for its largest monthly gain ever. The company’s AI Data Cloud provides a unified platform for analyzing data and building AI applications. Like Datadog, there was a clear catalyst for Snowflake’s hallmark performance: its Q1 FY2027 earnings report. (Snowflake’s fiscal reporting period is several quarters ahead of the calendar year period.)

Snowflake Today

$237.21 -3.18 (-1.32%)

As of 12:21 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$118.30▼

$284.99Price Target$291.77

The stock gained almost 37% after the report as Snowflake posted beats on sales and adjusted EPS. The company also raised its full-year guidance, projecting sales of $5.84 billion, compared to its prior estimate of $5.66 billion. Furthermore, Snowflake allocated $6 billion to Amazon.com NASDAQ: AMZN to access more of its Graviton chips. This signals confidence in the firm’s outlook as Snowflake supports its growth through this significant spending commitment.

The MarketBeat consensus price target on Snowflake currently sits at $284, implying moderate upside from recent trading levels. The average of targets updated after the company’s report sits near $291, implying healthy upside. Still, most analysts maintain a positive rating on the stock, with Snowflake having 36 Buys compared to just five Holds and one Sell.

AI Software Stocks Make Their Voice Heard in MayNotably, large gains in the AI trade were not limited to the hardware stocks that have traditionally dominated. Several software players saw very strong performance as well, rebounding after many names in this industry were crushed earlier in the year. This signals that AI-related success is broadening as AI application building becomes a larger focus in the market.

Should You Invest $1,000 in Snowflake Right Now?Before you consider Snowflake, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Snowflake wasn't on the list.

While Snowflake currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

The AI wave will soon hit public markets with Anthropic and OpenAI set to go public later this year. However, you don't have to wait to invest. This report shows seven AI stocks that you can buy today while the big model providers get ready to go public.

Get This Free Report

Software stocks are staging a strong comeback after a bruising selloff earlier this year, as investors increasingly bet that artificial intelligence will become a growth catalyst for the industry rather than a disruptive threat.

The turnaround has been swift.

The iShares Expanded Tech-Software Sector ETF (IGV), a widely followed benchmark for software shares, has surged nearly 42% from its April low.

The ETF, which had fallen as much as 30% earlier in 2026 amid concerns that AI could replace many traditional software functions, is now down less than 2% for the year.

The recovery reflects a shift in investor sentiment as market participants reassess how software companies may benefit from AI adoption instead of being displaced by it.

“While AI is causing massive disruption, it is remapping the industry rather than destroying it,” Daniel Morgan, portfolio manager at Synovus Trust in Atlanta, told Reuters.

The renewed enthusiasm is not lifting all software stocks equally.

Investors are increasingly gravitating toward companies that are successfully integrating AI into their offerings and adapting pricing structures to reflect actual usage rather than charging customers based primarily on employee headcount.

The distinction has become increasingly important as businesses deploy AI tools that can perform tasks traditionally handled by large workforces, potentially reducing the effectiveness of conventional subscription-based pricing models.

Analysts and portfolio managers cited by Reuters highlighted cloud security providers Datadog and Palo Alto Networks, chip design software company Synopsys, and technology giants Oracle and Microsoft as some of their preferred ways to play the theme.

The software rally gained momentum after a months-long selloff that many investors considered excessive.

As enthusiasm for AI-powered chipmakers and broader technology stocks intensified, bargain hunters began returning to software names that had suffered some of the steepest declines.

The recovery accelerated last week after strong earnings reports and upbeat forecasts from Snowflake and MongoDB improved confidence in the sector's outlook.

Another boost came on Monday when Nvidia CEO Jensen Huang delivered a bullish assessment of software demand during his keynote address at the Computex technology conference in Taipei.

Addressing concerns that AI agents could diminish the need for software applications, Huang argued the opposite.

“The world is no longer limited by the number of people, therefore those agents are going to use more tools than ever,” he said.

“This is actually an incredible time to be a software company.”

His comments helped fuel another wave of buying across software stocks, reinforcing the view that AI could create new markets and revenue streams rather than simply replacing existing products.

Among the standout performers is Datadog DDOG, which has benefited from rising demand for security and monitoring tools used by AI-powered data centers.

Jonathan Cofsky, portfolio manager at Janus Henderson, said the company’s usage-based pricing model positions it well for the AI era.

Datadog shares have nearly doubled this year and recently hit a record high after the company raised its annual outlook.

Palo Alto Networks has also emerged as a favorite among investors. Even though the stock fell on Tuesday, it hit record high on Monday and is up more than 57% for the year.

Doug Rogers, portfolio manager at Eaton Vance, believes the growing complexity of cybersecurity threats will support stronger pricing power for the company.

“As the number of potential threats and vulnerabilities and the awareness of those vulnerabilities increases, so should the price Palo Alto is able to charge for defending against them,” Rogers told Reuters.

Oracle has also regained favor after recovering from sharp earlier losses.

Marc Dizard, chief investment officer at Huntington National Bank, said Oracle’s large customer base gives the company flexibility as it refines its AI monetization strategy.

Meanwhile, investors continue to view Microsoft as one of the safest long-term AI bets.

Despite its subscription-heavy revenue model, analysts point to growth opportunities from its Copilot AI assistant and Azure cloud platform.

“Given its size and breadth, it's more than a survivor. It'll always be in the game,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.

Datadog has evolved into a unified platform for cloud infrastructure, security, and application monitoring, driving robust growth and profitability. Q1 2026 revenue reached $761.6M (up 25% YoY), with non-GAAP EPS of $0.46 and strong customer expansion across multiple product lines. AI workload monitoring and deepening customer adoption position DDOG for continued high growth, with a five-year annual growth estimate of 19% and a target price of $520.80.