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    Is Datadog’s (DDOG) AI Upside Now Too Dependent on Snowflake’s Strength?

    Simply Wall St·09/04/2026 13:35:44
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    • In early September 2026, Datadog drew attention after peer Snowflake reported strong quarterly revenue and raised full-year product revenue guidance, lifting sentiment around enterprise AI infrastructure providers.
    • This reaction highlighted how closely Datadog’s outlook is now tied to broader optimism about AI-related cloud demand, despite its own recent customer usage headwinds.
    • With Snowflake’s strong results underscoring enterprise AI demand, we’ll now examine how this shifts Datadog’s investment narrative and risk balance.

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    Datadog Investment Narrative Recap

    To own Datadog, you need to believe in its role as a core observability and security platform for AI-heavy cloud workloads, while accepting meaningful customer and competitive risk. Snowflake’s strong AI-driven print has lifted sentiment, but it does not remove Datadog’s near term exposure to usage optimization and contract changes at large customers, which remains the key catalyst and the main operational risk in the story right now.

    Among recent updates, Datadog’s April launch of GPU Monitoring is especially relevant. It speaks directly to the same enterprise AI infrastructure spending that helped Snowflake’s results and underpins the sympathy move in Datadog’s shares. For investors, traction of products like GPU Monitoring with AI-native customers could be an important signal on whether enthusiasm about AI demand can offset ongoing concerns about revenue concentration and cost optimization.

    Yet beneath the AI enthusiasm, investors should also understand how concentrated AI workloads could still pressure Datadog’s margins and revenue growth if...

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

    Datadog's narrative projects $7.7 billion revenue and $771.6 million earnings by 2029. This requires 24.5% yearly revenue growth and about a $594 million earnings increase from $177.6 million today.

    Uncover how Datadog's forecasts yield a $285.18 fair value, a 33% upside to its current price.

    Exploring Other Perspectives

    DDOG 1-Year Stock Price Chart
    DDOG 1-Year Stock Price Chart

    Some of the lowest ranked analysts take a much more cautious view, highlighting AI customer concentration and forecasting revenue of about US$6.7 billion and earnings near US$360.7 million by 2029, so if you are watching Snowflake’s upbeat AI signal and Datadog’s AI exposure, it is worth knowing that views on how this plays out can differ sharply.

    Explore 5 other fair value estimates on Datadog - why the stock might be worth just $223.41!

    Decide For Yourself

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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.