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Datadog Stock: Soars on Strong Earnings and AI Boom

Felix Baarz by Felix Baarz
August 7, 2025
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Datadog’s stock surged over 8% in pre-market trading after the cloud-monitoring company reported better-than-expected Q2 results, with earnings per share reaching $0.46—beating estimates by 12.2%. Revenue climbed 28% year-over-year to $827 million, far exceeding the $790.9 million forecast. Key drivers included robust AI adoption, with AI-native customers now contributing 11% of total revenue, up from 8% last quarter. The company also achieved a milestone in its security segment, surpassing $100 million in annual recurring revenue with over 40% growth.

Raised Guidance and Analyst Optimism

Management raised its full-year revenue forecast to $3.312–$3.322 billion, while Q3 projections suggest $847–$851 million in sales. Analysts responded by lifting price targets, citing Datadog’s strong positioning in cloud observability and AI-driven demand. Despite a sharp decline in GAAP net income due to heavy investments, adjusted profitability and free cash flow ($165 million) underscored operational strength. With eight of the top ten AI firms as clients, Datadog remains a key beneficiary of cloud migration and AI expansion.

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Felix Baarz

Felix Baarz

My name is Felix Baarz, and I look back on over fifteen years of experience as a business journalist. I have always been fascinated by the mechanisms and dynamics of global financial markets as well as the complex economic and political interconnections that shape our world. With this passion, I have made a name for myself as an expert on international financial markets and dedicate myself with great commitment to making even the most complex topics understandable and accessible to my readers. My roots lie in Cologne, where I was born and raised. Early on, my curiosity about economic topics and international developments sparked my interest in journalism. After completing my studies, I began my career as a business editor at a respected German trade publication. Here I laid the foundation for my professional career, but my curiosity soon drew me out into the wider world. A turning point in my life was moving to New York, where I lived for six years and gained insight into leading media houses. In this vibrant metropolis, I was able to report firsthand from the heart of the global financial world. From daily developments on Wall Street to major economic policy decisions that make waves worldwide, I had the opportunity to write about central topics that move people and markets alike. This time shaped my perspective and sharpened my view of global interconnections.

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