Bernstein upgrades Datadog as AI usage growth offsets a lost OpenAI contract
Bernstein moved Datadog to Outperform and lifted its price target to $350. The shares rose 6.9% on stronger demand from AI customers.
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what happened
According to Barron's, Bernstein analysts upgraded Datadog to Outperform from Market Perform in a note on Monday, October 19. They raised the price target to $350 from $237, implying 42% upside from Friday's close of $247.11.
The analysts said Datadog's biggest AI customers are spending more than they expected. Their enterprise AI token consumption rose at least 50% quarter over quarter in the third quarter, with smaller customers growing even faster. They now believe this surge may have nearly offset a reduction of more than $100 million in the annual contract from the largest customer, which Bernstein believes is OpenAI.
The stock climbed 6.9% to $264.18 on Monday and is up 94% this year, according to Dow Jones Market Data. Analysts conceded their earlier estimates were off, writing: “Clearly our imagination failed us.”
why it matters
For markets, the note suggests that rising AI workloads could compensate for large contract losses at software providers. Bernstein also said growing use of consumer AI agents could lift demand for the monitoring tools that keep those systems running.
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- Datadog Stock Gets an Upgrade as OpenAI Setback May Be Fading — Barrons.com, 19 October 2026 at 16:58 UTC
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