Why Datadog (DDOG) Is Up 8.4% After Strong Q4 2025 Earnings And 2026 Revenue Guidance

• Datadog reported its fourth-quarter and full-year 2025 results on 10 February 2026, with Q4 revenue rising to US$953.19 million and full-year revenue to US$3.43 billion, while net income increased modestly in Q4 but fell to US$107.74 million for the year.

• The company paired this with guidance calling for first-quarter 2026 revenue of US$951 million–US$961 million and full-year 2026 revenue of US$4.06 billion–US$4.10 billion, reinforcing the importance of its expanding observability and AI product suite.

• We’ll now examine how Datadog’s stronger-than-expected Q4 revenue and upbeat 2026 guidance affect the existing investment narrative around the stock.

The future of work is here. Discover the 30 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation.

To own Datadog, you need to believe its observability and security platform can stay central to cloud and AI workloads despite rising competition and cost scrutiny. The latest Q4 beat and strong 2026 revenue guidance support the near term catalyst of continued adoption of its broader product suite, but they do not remove key risks around margin pressure and growing reliance on large AI native customers.

The most relevant recent update is Datadog’s 2026 revenue outlook of US$4.06 billion to US$4.10 billion, which builds directly on the stronger than expected Q4 sales of US$953.19 million. This guidance matters for the catalyst around broader observability and AI product uptake, because it ties management’s near term confidence to concrete numbers, while still sitting against a backdrop of rising operating expenses and intensifying hyperscaler and open source competition.

Yet beneath the upbeat revenue guidance, investors should also be aware of rising operating costs and expanding customer concentration risk…

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 $208.49 fair value, a 61% upside to its current price.

Pessimistic analysts were assuming Datadog would reach only about US$4.3 billion of revenue and US$228 million of earnings by 2028, so if you worry about customer dependence and margin pressure, this Q4 surprise could either soften those concerns or reinforce them, depending on how you think usage and pricing evolve from here.

Explore 9 other fair value estimates on Datadog – why the stock might be worth 10% less than the current price!

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

Markets shift fast. These stocks won’t stay hidden for long. Get the list while it matters:

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.

Companies discussed in this article include DDOG.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com