Tuesday, December 12

Datadog: Defying The Slowdown Myths

It turns out that the data business sure is booming because one of our old favorites: Datadog ($DDOG) has once again ripped past our price target 6 months ahead of schedule. 

The team here at Moby held off on updating this one because we saw the recent price action here as potentially overbought. But DDOG has stabilized at this new level, so it's important that we set expectations for future growth. 

Looking backward, we see that Datadog was getting fairly undervalued in the run-up to their Q3 earnings release last month because of projections that they were going to see a sharper slowdown in revenue growth. Basically, Datadog has been scaling at such an insane rate for over a year that investors figured they were about to plummet as they found a more sustainable level. 

Instead, revenue grew 25% YoY, suggesting that DDOG is flattening growth at a much higher level than The Street thought possible. More importantly, the team at Datadog projected that Q4 growth will easily hit 21%. 

This figure is key moving forward as it paves the way for Datadog to have outsized growth across 2024. Our previous updates here have focused on the tech, but this strategy is all business. Datadog has used an incredible 18 months of growth to build and refine a product set that is becoming essential for basically any digital enterprise. 

So let's explore the details of how Datadog can keep its incredible rise moving as the AI market really starts to materialize in 2024.👇

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