What Happened?
Shares of cloud monitoring platform Datadog (NASDAQ: DDOG) jumped 7.3% in the afternoon session after Stifel upgraded the stock from a "Hold" to a "Buy," citing expectations for a strong fourth-quarter performance.
The upgrade came as the firm's checks suggested Datadog was poised for a "larger than typical" quarterly beat, with its core growth accelerating. Stifel set a new price target of $160. Adding to the positive outlook, analysts at Guggenheim also expected the company's revenue growth to accelerate. In separate commentary, Bernstein assigned the company an "Outperform" rating and a $180 price target. The collective optimism from analysts pointed toward a robust upcoming financial report for the company.
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What Is The Market Telling Us
Datadog’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 22 hours ago when the stock gained 5.6% on the news that President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies.
The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks.
The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
Datadog is down 1.3% since the beginning of the year, and at $132.09 per share, it is trading 33.9% below its 52-week high of $199.72 from November 2025. Investors who bought $1,000 worth of Datadog’s shares 5 years ago would now be looking at an investment worth $1,258.
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