Bernstein Upgrades Datadog to Outperform, Raises Price Target to $350 on AI Demand

Bernstein upgraded Datadog (DDOG) to "Outperform" from a prior neutral stance and raised its price target to $350, implying roughly 35% upside from current levels. Analyst Peter Weed cited stronger-than-expected expansion among the cloud monitoring company's artificial intelligence clients. Datadog shares are trading at about twice their price at the start of this year. Bernstein's alternative data indicates enterprise token consumption grew at least 50% sequentially among the largest AI labs, with potentially faster growth at smaller AI-native businesses. Weed had previously questioned whether enterprise budgets and implementation hurdles would restrain spending growth into 2027, telling clients that "our imagination clearly failed us." The firm raised its 2026 earnings forecast for Datadog to $2.82 per share and expects $4.00 next year. Those revisions exclude any improvement in the company's traditional customer base, which Weed views as a potential cushion. He also flagged cybersecurity demand and Scout v1.0, Datadog's site reliability engineering AI agent, as additional drivers. The consensus rating on DDOG stands at "Strong Buy" with a mean price target of about $297.