Datadog (DDOG) stock is rising today after a UBS analyst issued a highly bullish take on the data observability company. Five-star analyst Karl Keirstead has upgraded DDOG stock from a Neutral to a Buy rating and raised his price target from $120 to $150. This new prediction implies upside potential of 18%.
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Keirstead isn’t the only analyst who sees Datadog as a likely winner. Morgan Stanley’s Sanjit Singh maintained a Buy rating on the stock yesterday and retained a bullish price target of $137.00.
What’s Going On with Datadog Stock Today?
This rising bullish sentiment is generating positive momentum for Datadog stock today. DDOG jumped 3% in premarket trading and, as of this writing, is up on the day. Trading has been volatile over the past week, but Datadog has still performed well this month, rising 12% so far.
Now, optimism from Wall Street is likely to help it continue trending upward. Part of Keirstead’s bullishness centers around the growth he sees for the AWS/Azure cloud infrastructure sector, a potential tailwind for Datadog. “We believe these trends could help Datadog maintain or even modestly accelerate its mid-20% growth rate in the coming quarters,” he stated in a note to clients.
In addition, the analyst increased his estimates for Datadog’s 2025 and 2026 revenue growth to a 25-30% range. Previously, he had predicted that growth would fall in the range of 25-26%. Singh also predicts that Datadog will benefit from an increase in demand for its services, helping it sustain recent growth.
Is Datadog Stock a Strong Buy?
Kierstead and Singh aren’t alone in their bullish stances on Datadog. Overall, analysts have a Strong Buy consensus rating on DDOG stock based on 23 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 43% rally over the past year, the average DDOG price target of $143.71 per share represents an 11.53% change from current levels.
Datadog is scheduled to report earnings for Q3 2024 on November 7. The company demonstrated strong growth in Q2, with a year-over-year revenue increase of 27%. If the upcoming report reveals similar growth, it will likely prove a substantial growth catalyst for DDOG stock.
