10 AI Stocks to Keep on Your Radar

7. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 72

Datadog, Inc. (NASDAQ:DDOG) is one of the 10 AI Stocks to Keep on Your Radar. On February 4, KeyBanc analyst Eric Heath lowered the price target on the stock to $155.00 (from $170.00) while maintaining an Overweight rating. The firm believes in DDOG’s positioning but needs clarity on 2026 guide.

The firm noted how DDOG needs to mirror a setup similar to Q3, with acceleration in its core business and stability in revenue contribution from OpenAI. Even if the company posts another modest beat of roughly 4%, consistent with the previous quarters, the firm expects management’s initial guidance to be more cautious than consensus estimates.

If management follows its previous FY revenue guidance approach, it may assume slightly lower net new revenue year-over-year for the core business. Under the framework, the implied revenue growth may be in high-teens.

KeyBanc noted OpenAI to be a significant variable, potentially representing up to $300 million in revenue and an estimated 90% of Datadog’s AI-native customer segment. If Datadog’s guidance assumes flat growth for OpenAI, then total revenue guidance may be in the mid-to-high teens percentage range. This is compared to KeyBanc’s estimate of 20% and consensus expectations of 21% growth.

Overall, investor sentiment for DDOG remains mixed, while feedback has been largely positive on DDOG’s innovation, leadership, and potential AI tailwinds. Concerns such as price pressure also remain.

Investor sentiment on Datadog we believe is the most debated within our coverage. Investor feedback is generally positive on Datadog’s innovation, category leadership, potential AI tailwinds, and opportunity to be successful in security. However, the medium-term concern is price pressure from Palo and incremental competition from data platform vendors, while the near-term concern remains 2026 guidance dynamics and headline risk from potential OpenAI churn. And in this software environment, anything that isn’t indisputably clean doesn’t work T+1.

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