DDOG Stock Surged 22% Today: What’s Powering The Rally?

by

The company’s third-quarter (Q3) revenue increased 28% year-on-year to $886 million with an adjusted earnings per share of $0.55.

  • Datadog is seeing strong momentum from its AI-focused clientele.
  • The company serves 4,060 customers with annual recurring revenue of $100,000 or more.
  • Datadog expects Q4 revenue to be between $912 million and $916 million.

Datadog Inc. (DDOG) Chief Financial Officer David Obstler stated during the earnings call on Thursday that the company is experiencing strong momentum from its AI-focused clientele, underscoring how its strategic focus on artificial intelligence is yielding positive results. 

Add Asianet Newsable as a Preferred Source

“We now have more larger AI customers, including 15 of them spending $1 million or more annually with Datadog, and about 100 spending more than $100,000 annually”.

-David Obstler, CFO, Datadog

Datadog’s third-quarter (Q3) revenue increased 28% year-on-year (YoY) to $886 million with an adjusted earnings per share (EPS) of $0.55. Both revenue and EPS surpassed the analysts’ consensus estimate of $852.2 million and $0.46, respectively, according to Fiscal AI data. 

Revenue Contributions Climbing

The AI-native segment now accounts for 12% of total revenue in the third quarter (Q3), a rise from 11% in the previous quarter and nearly double the 6% contribution recorded a year ago, said Obstler. 

This indicates that Datadog’s investments in AI tools and infrastructure are yielding measurable business growth.

Datadog’s stock traded over 22% higher on Thursday morning. On Stocktwits, retail sentiment around the stock jumped to ‘extremely bullish’ from ‘neutral’ territory the previous day. Message volume improved to ‘extremely high’ from ‘normal’ levels in 24 hours. 

Key Metrics

Datadog now serves approximately 4,060 customers with annual recurring revenue (ARR) of $100,000 or more, a 16% YoY increase. The company generated $251 million in operating cash flow and $214 million in free cash flow in Q3. 

For the fourth quarter, Datadog expects revenue to be between $912 million and $916 million, and adjusted EPS to be between $0.54 and $0.56. For 2025, the company anticipates revenue between $3.386 billion and $3.390 billion and adjusted EPS between $2.00 and $2.02.

Datadog stock has gained over 31% in 2025 and over 46% in the last 12 months. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<

Leave a Comment