Is Datadog (DDOG) Turning AWS Deeper Integration Into a Lasting AI Moat?

• Earlier this month, Datadog announced an expanded partnership with AWS at re:Invent and introduced new products targeting AI observability, storage efficiency, serverless infrastructure, and security on its unified SaaS platform.
• This combination of deeper AWS integration and AI-focused observability tools highlights how Datadog is positioning itself as core infrastructure for monitoring increasingly complex cloud and AI workloads.
• Next, we’ll examine how Datadog’s expanded AWS partnership and AI observability launches may influence its existing investment narrative.

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Datadog Investment Narrative Recap

To own Datadog, you need to believe observability and security stay essential as cloud and AI workloads grow more complex, and that Datadog can convert that demand into profitable, durable revenue. The expanded AWS partnership and AI observability launches support this thesis but do not fundamentally change the biggest near term swing factors, which remain customer spending patterns in AI heavy accounts and the tension between heavy investment and profitability.

Among the recent announcements, the AI observability products unveiled at AWS re:Invent look most relevant, because they deepen Datadog’s role in monitoring newer AI driven workloads that are increasingly important for large customers. If these tools help Datadog capture more telemetry and consolidate spend on its platform, they could reinforce its position with demanding AI native customers at the same time that hyperscalers and open source rivals are competing hard for similar budgets.

Yet even with these product wins, investors should be aware that growing reliance on a handful of large AI customers could still...

Read the full narrative on Datadog (it's free!)

Datadog's narrative projects $5.2 billion revenue and $406.8 million earnings by 2028.

Uncover how Datadog's forecasts yield a $211.97 fair value, a 53% upside to its current price.

Exploring Other Perspectives

Nine fair value estimates from the Simply Wall St Community currently span roughly US$116 to US$212 per share, showing how far apart individual views can be. Against this backdrop, Datadog’s dependence on a concentrated group of AI native customers remains a key factor that could influence how those different expectations ultimately play out.

Explore 9 other fair value estimates on Datadog - why the stock might be worth 16% less than the current price!

Build Your Own Datadog Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Datadog research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Datadog research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Datadog's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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