Analysts See Datadog (DDOG) As A Promising Cloud Stock For 2026

Datadog, Inc. (NASDAQ:DDOG) is one of the most promising cloud stocks according to analysts. On January 22, Stifel upgraded Datadog, Inc. (NASDAQ:DDOG) from Hold to Buy, raising the price target to $205 from $160. The upgrade comes amid expectations of a strong Q4 earnings report. Similarly, on January 16, RBC Capital analyst Matthew Hedberg reaffirmed the firm’s price target of $175, along with a Buy rating on the stock. The firm’s price target implies a further 25% upside from the current levels.

Datadog (DDOG) Tumbles 11.4% on Analyst's "Sell" Reco

However, Citi analyst Fatima Boolani lowered the firm’s price target on the stock from $200 to $175 while maintaining a Buy rating on January 15. The price target adjustment came as part of the firm’s broader update to price targets in the infrastructure software group tied to its 2026 outlook. The firm highlighted that the strong momentum seen across the sector during 2025 is anticipated to continue into 2026.

Pressured by concerns about potential category commoditization, OpenAI’s concentrated influence, and pricing headwinds, the stock has lagged recently. Analyst Fatima Boolani also noted the mixed investor sentiment toward the stock and said:

”From our investor discussions, we’ve also sensed mixed views on the aggregate AI-native exposure, which, while clearly attractive and corroborating DDOG’s status as an ‘AI Winner’ is also being perceived more measuredly, given business cycle volatility and outsized churn risk considerations in this crop of customers – almost akin to the ZIRP-era startups to whom DDOG had exposure.”

Datadog, Inc. (NASDAQ:DDOG) operates a security and observability platform for cloud applications. It offers a comprehensive suite of products, including log management, continuous profiler, data observability, network monitoring, error tracking, digital experience monitoring,  infrastructure & application performance monitoring, and others.

While we acknowledge the potential of DDOG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than DDOG and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.