Datadog stock faces AI usage test after Needham keeps 300 dollar target
Published on 11/05/2026 at 13:48 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSAnalyst conviction meets AI concentration
- Needham kept its Buy rating after Datadog's third-quarter report and maintained its 300 US dollar price target.
- The largest customer reduced usage, while non-AI customer growth accelerated for a fifth consecutive quarter.
- The next major test is Datadog's 2027 outlook, expected with fourth-quarter results in February.
Needham kept its Buy rating and 300 US dollar price target for Datadog after the company reported its third-quarter results on Wednesday, according to TIKR. The research view contrasts stronger core-business growth with near-term pressure from the software group's largest AI customer.
Datadog's third-quarter revenue rose 35% year over year to 1.20 billion US dollars, TIKR reported. Revenue growth outside the AI customer group accelerated for the fifth consecutive quarter and reached the high-20% range. Management's fourth-quarter revenue outlook of 1.19 billion to 1.20 billion US dollars implies little sequential expansion, however.
AI concentration drives the debate
The largest customer reduced usage in the third quarter. Chief Financial Officer David Obstler said the fourth-quarter outlook assumes revenue from that customer at its contractual minimum, according to the report. Several large AI customers also renewed early while securing better pricing, creating an additional short-term headwind.
TIKR said growth excluding the largest customer implied a low- to mid-30% range. The contrast leaves investors weighing the durability of Datadog's broad platform demand against concentration risk among the biggest AI accounts.
Datadog raised its 2026 non-GAAP earnings guidance to 2.73 to 2.75 US dollars per share, while analyst estimates cited by TIKR stood at 2.53 US dollars for the year. Needham's target was retained despite the recent selloff; BTIG kept its Buy rating but lowered its target to 260 US dollars from 289 US dollars, according to TIKR.
TIKR reported that Datadog stock fell 14.4% to close at 188.72 US dollars on Wednesday, November 4. The report also said the stock was 36% below its October high, putting valuation and the pace of AI customer recovery at the center of the investment case.
The real-time quote of Datadog stock was 165.40 euros on Lang & Schwarz at 13:39 CET on Thursday, November 5, 2026.
Datadog stock at a glance
- Company: Datadog, Inc.
- ISIN: US23804L1035
- Ticker: DDOG
- Lang & Schwarz quote: 165.40 euros on Thursday, November 5, 2026, at 13:39 CET
The S&P 500 provides the broader US market backdrop for Datadog stock.
More news and analyses on Datadog stock will remain focused on customer expansion, AI usage and the next earnings outlook. TIKR identified the 2027 outlook, expected with fourth-quarter results in February, as the next major test for the thesis.
