Bernstein upgraded Datadog to outperform, target 350, on stronger-than-expected AI-native demand, token usage at top AI labs up at least 50% quarterly and short-term growth estimates raised about 7 points; earlier ARR concerns from a $100 million contract decline are dispelled; Jefferies cut its target to 280.

Let's talk about Datadog. That's an increase of about 6%. Yes. This is a positive outlook from the analyst community. This comes from Bernstein. Bernstein upgraded DataDog from 'market perform' to 'outperform'.

So, despite the stock's performance on a year-to-date basis, they were largely staying away from this stock. But again, a large portion of that gain has come in the last 6 months.

Year-over-year, the stock has risen more than 50%.

They upgraded DataDog from 'Market Perform' to 'Outperform' again. They raised their price target to 350. So, they see potential for further improvement from here, even though the share price has risen more than 80% since the beginning of the year before today.

Analysts say demand from AI-native customers , that is, businesses built around artificial intelligence, is much stronger than expected. Analysts say the use of AI is showing positive surprises from here.

Their data and channel checks show that token usage rates in the largest AI labs have increased by at least 50% on a quarterly basis. So, there is potential there and they believe that this usage rate can grow even faster among smaller AI-native customers , Nicole said.

They raised their short-term growth expectations by about 7 percentage points. They hope this strong growth will last. They were cautious earlier, as they said their annual recurring revenue (ARR) had fallen by about $ 100 million due to a contract decline at their largest AI-native customer.

But it seems that those concerns have now been dispelled and their current customer base is showing that they will forgive.

Sorry, Nicole, better times are coming. Yes, I would like to add , I saw Jefferies cut their target from 300 to 280. However, among others, Bernstein has set 350, Mizuho 330. So, there are a lot of calls coming in from analysts now and you've really captured the essence of the analyst mindset and why they're a little bit more optimistic, except for the first one, who lowered the target a little bit.