Datadog (DDOG), a cloud-based software company, will officially join the S&P 500 (SPX) on July 9, and the stock has already jumped more than 15% since the announcement. Even after the rally, BofA Securities Top analyst Koji Ikeda sees more room to run. He raised his price target to $175 from $150 and reiterated a Buy rating, naming Datadog a “top pick” in the infrastructure software space.
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Top Analyst Stays Bullish on DDOG Stock
The five-star analyst believes the S&P 500 inclusion is more than just a one-time catalyst. While the move may have surprised the market, the analyst contends it highlights Datadog’s strong fundamentals and supports a positive long-term outlook for the stock. “We believe investors should stick with it,” he wrote.
He remains bullish on the stock, highlighting Datadog’s strong revenue growth and solid cash generation as key drivers of his outlook. Ikeda also expects the S&P 500 entry to boost visibility. Index-tracking funds will now need to buy DDOG shares, which could lift institutional ownership and improve investor sentiment in the second half of 2025.
Further, the analyst believes that Datadog should trade at a premium valuation given its leadership in the “DevSecOps category” and its robust growth profile.
Is Datadog a Buy or Hold?
According to TipRanks, Datadog currently carries a Strong Buy rating based on 37 Wall Street analyst reviews in the past three months. Out of those, 31 analysts recommend Buy, while 6 suggest Hold, and none rate it a Sell.
The average 12-month price target for DDOG stock is $140.46, which reflects a -9.47% downside from current levels.
