DDOG - Off the Leash; Upgrading to Buy

研报英文原文证据摘录

DDOG - Off the Leash; Upgrading to Buy

Truist Securities

Executive Summary

Yes, we’re late to the party. We don’t think it’s stopping any time soon. Underwriting the logic to go higher from here.

Updated Thesis: We view Datadog as a core beneficiary of agentic AI adoption with structural tailwinds that are aligned to produce

durable growth. The core pillars of the company’s growth engine continue to hum along, and rapid product flywheel produces opportunities

for a broadening of their influence in the software stack as enterprises look to consolidate vendors. Though we acknowledge valuation

is not cheap, we believe the premium is deserved for their favorable positioning in the consumption path of AI. We believe that agentic

AI adoption remains in early innings across enterprises globally, and increasing adoption of AI could accelerate growth further and push

shares higher.

What Changed? Relationships with Frontier lab customers are hyper-critical in the early adoption of AI as these companies soak up

a disproportionate share of the increase in telemetry data. Over the last year, we have had low visibility into the prospects of OpenAI

remaining onboard amid reports of their attempts to optimize, migrate, or roll their own observability solutions. While we do not believe

these outcomes are fully off the table, commentary from frontier labs in recent weeks has given us increased confidence in the stability of

the relationship going forward and avoidance of a full churn. We model OpenAI’s spend on DDOG to moderate over the next two years,

and we expect Anthropic’s (Private) spend to continue to ramp.

What Could Drive Shares Higher From Here? The recent acceleration in the non-AI-native customer base has created a significant