Stifel Upgrades Datadog (DDOG) to Buy Ahead of Earnings, Sees Upside Surprise Potential

Datadog, Inc. (NASDAQ:DDOG) is 1 of the AI Stocks successful Focus connected Wall Street. On January 22, Stifel expert Brad Reback upgraded the banal from Hold to Buy with a terms people of $160.00 (from $205.00). The standing upgrade comes up Q4 2025 net study owed connected February 10, citing upside astonishment imaginable and charismatic semipermanent valuation.

According to the firm’s caller checks, DDOG is poised to station different larger than emblematic quarterly bushed successful Q4, an estimated 4% oregon more, driven by accelerating halfway growth, sustained beardown gains wrong the non-OAI genAI cohort, and quarter-over-quarter stableness successful OpenAI performance.

The nett effect is we judge DDOG’s 4Q maturation rate, excluding OAI, should beryllium >23%. 

Looking ahead, Stifel anticipates absorption to usher calendar twelvemonth 2026 gross to an estimated $4.1 billion, implying blimpish halfway maturation supra 19% excluding OpenAI.

The steadfast assumed OAI to stay astatine its existent quarterly tally complaint of astir $90 cardinal done 2026, which leads to yearly OAI gross of $360 cardinal compared to an estimated $305 cardinal successful 2025.

Stifel besides discussed however DDOG has had caller occurrence successful S&M efforts and ongoing R&D investments, and that it would beryllium amazed if absorption guided modestly beneath existent Street expectations (~23%).

Net/net, with shares trading astatine ~8x CY27E EV/Rev and 30x CY27E EV/FCF, valuation appears comparatively charismatic for 1 of the fewer names we screen with accelerating halfway growth.

Datadog, Inc. (NASDAQ:DDOG) offers a cloud-based SaaS level for monitoring and analytics, specializing successful unreality computing and AI-powered cybersecurity products.

While we admit the imaginable of DDOG arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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Disclosure: None.