Datadog shares fell approximately 12% as concerns over AI-related spending hit cloud stocks. The share price stood at $235.27 at the end of October, down 11.5%, and the company is scheduled to release third-quarter results on November 4.
Datadog closed at $235.27 on October 30, down approximately 11.5% from the previous day. There was no company announcement, and concerns over AI-related spending weighed on technology stocks broadly after earnings announcements from Amazon and Intel. Snowflake also fell more than 7%. Datadog is scheduled to release its third-quarter results before the market opens on November 4.
The stock fell 14.1% in October from September, when it closed at $273.85. The next-12-month EPS forecast from the following quarter onward was unchanged at approximately $2.65, while the revenue outlook for 2026-2028 edged up. Forward P/E fell from approximately 103x to approximately 89x. Meanwhile, analysts' price targets have been trending higher, with the average target currently approximately 25% above the current share price.
The market also focused on the proposal to acquire Upwind, but the acquisition proposal reported on October 24 was considered and is now viewed as unlikely to proceed. Datadog's CFO said at a Goldman Sachs event that signs were emerging of AI demand shifting in-house, and that use of AI monitoring products was expanding.
A risk factor identified was the risk of spending cuts by Datadog's AI-native customers. The view is that an early slowdown could occur because of changes in customers' budget allocations, rather than dependence on major AI research laboratories.