We came across a bullish thesis on Datadog, Inc. on T K’s Substack. In this article, we will summarize the bulls’ thesis on DDOG. Datadog, Inc.’s share was trading at $111.69 as of February 6th. DDOG’s trailing and forward P/E were 360.29 and 46.08 respectively according to Yahoo Finance.
Charts
Datadog (DDOG) is a leading monitoring and analytics platform serving developers, IT operations teams, and business users, with a focus on Observability—helping companies understand exactly what is happening across complex cloud infrastructures such as AWS, Azure, and Google Cloud. Its offerings include infrastructure monitoring for real-time visibility into servers, databases, and containers, application performance monitoring to pinpoint the source of slowdowns, and log management to troubleshoot issues before they escalate.
Datadog’s unified platform consolidates all critical operational data into a single dashboard, eliminating silos and improving efficiency for technical teams. Growth drivers for the company are compelling. AI integration, particularly through its “Bits AI” initiative, positions Datadog as the essential monitoring solution for Large Language Models, while vendor consolidation trends encourage enterprises to replace multiple monitoring tools with Datadog’s all-in-one platform. The ongoing global shift to cloud infrastructure expands the addressable market, and the company’s expansion into cloud security creates a significant new revenue stream by combining security and monitoring in one solution.
While Datadog faces risks from cloud spending optimization during economic slowdowns, competition from incumbents like New Relic and niche players like Dynatrace, and sensitivity to interest rates due to its high-growth SaaS profile, its market positioning remains strong. The platform’s combination of deep visibility, AI readiness, and multi-cloud integration gives it a durable competitive advantage. As businesses increasingly rely on cloud operations, Datadog is well-placed to capture the growing need for observability and security, offering investors a high-quality growth story with multiple catalysts that could drive both revenue expansion and a meaningful rerating of the stock.
Previously, we covered a bullish thesis on Datadog, Inc. (DDOG) by @bigbullcap in May 2025, which highlighted the company’s diversified product suite and strong innovation pipeline. DDOG’s stock price has depreciated by approximately 2.42% since our coverage. T K shares a similar thesis but emphasizes AI integration, vendor consolidation, and cloud security expansion as key growth drivers for the company.
Datadog, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held DDOG at the end of the third quarter which was 103 in the previous quarter. While we acknowledge the risk and potential of DDOG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DDOG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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