Strong AI Boosts Datadog, Inc. (NASDAQ:DDOG) Q1 Results, But BMO Lowers Target on Macro Uncertainty

BMO Capital recently lowered the price target on Datadog, Inc. (NASDAQ:DDOG) to $130 from $152 and kept an Outperform rating on the shares. DDOG provides a monitoring and analytics platform for developers, information technology operations teams, and business users in the cloud in North America and internationally.

The company reported a mostly solid March quarter, highlighted by a roughly 3% beat to the firm’s and Wall Street’s consensus estimates and strong AI Native contribution to ARR, the analyst tells investors in a research note.

The advisory added that, consistent with its past writings, demand metrics have greater stock/multiple impact than margin and, given the weaker macro backdrop and compressed software valuations, it is lowering its price target.

A close-up of a laptop with a software engineer coding on the monitor.

While disclosing first quarter earnings, the firm provided guidance for Q2 revenue between $787 million and $791 million, representing 22%-23% year-over-year growth, and non-GAAP net income per share between $0.40 and $0.42. For fiscal year 2025, revenue is expected to be in the range of $3.215 billion to $3.235 billion, with an operating income of $625 million to $645 million and non-GAAP net income per share of $1.67 to $1.71. The company raised its full-year revenue guidance by $40 million compared to previous estimates due to strong performance in Q1 and visibility into Q2.

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