Wolfe Research upgrades this cloud computing stock on AI growth opportunities
DataDog could be the latest beneficiary of the growth opportunity in artificial intelligence, according to Wolfe Research. The investment firm upgraded the cloud computing stock to an outperform rating from peer perform. Analyst Alex Zukin also set a price target of $150. Shares of DataDog have slumped 17% this year and 24% in the last three months alone, but Zukin's forecast implies a roughly 26% upside ahead. DDOG YTD mountain DDOG YTD chart Zukin wrote that he first downgraded DataDog in February after the company shared underwhelming growth expectations for its fiscal year 2025. However, he grew more optimistic after attending Datadog's 2025 DASH conference in New York City, where he surveyed more than 150 of the company's customers. "Well, after attending DASH in NYC where the vibes were sky-high with AI announcements aplenty, we are here to say that we believe those turbulent times are in the rearview and this dog isn't just hunting again, it's feasting!" he wrote. "We walked away from our time at DASH more confident in the near-term growth opportunity around AI and remain confident in DDOG's market leading products driving long-term success." Specifically, fears around the concentrated AI cohort "dissipated" after a key renewal, with at least 17 of the top 50 AI companies now DataDog customers. The analyst added that customers seem to have growing traction around DataDog's security offerings. "We now view DDOG as one of the best positioned names in our coverage to benefit from AI adoption from both an adjacent (more workloads to be observed) and direct (new AI offerings) point of view and with shares trading at 10x CY26 sales, we are upgrading to an Outperform rating with a $150 PT," Zukin added.
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