We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights Datadog's, Dynatrace and Elastic
Read MoreHide Full Article
For Immediate Release
Chicago, IL – March 6, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Datadog's (DDOG - Free Report) , Dynatrace (DT - Free Report) and Elastic (ESTC - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
AI Push Boosts Enterprise Clientele: More Upside Ahead for Datadog?
Datadog's fourth-quarter 2025 results delivered a compelling case for the cloud observability platform's deepening relevance in an AI-driven enterprise landscape. Revenues climbed 29% year over year to $953 million, surpassing the top end of its own guidance, while full-year bookings reached a record $1.63 billion, up 37% year over year, including 18 deals over $10 million in total contract value.
Growth excluding AI-native customers accelerated to 23% year over year compared with 20% in the prior quarter, confirming that demand improvement was broad-based and not concentrated in a single cohort. This signals that Datadog's AI-era relevance is permeating the wider enterprise market rather than relying solely on a narrow segment.
The enterprise opportunity appears particularly underpenetrated. As of December 2025, 48% of the Fortune 500 are Datadog customers, yet the median ARR for those accounts remains below half a million dollars — pointing to substantial room for expansion within existing relationships. Customers generating more than $100,000 in ARR reached 4,310, representing approximately 90% of total ARR, while remaining performance obligations rose 52% to $3.46 billion, driven by a higher mix of multiyear enterprise contracts.
AI-native customer momentum remains a distinct tailwind. Datadog counts 14 of the top 20 AI-native companies as customers, with approximately 650 firms in this cohort growing at rates that significantly outpace the rest of the business. MCP server tool calls grew 11-fold in the fourth quarter compared to the third quarter, while more than 1,000 customers are now using Datadog's AI observability product, with usage increasing tenfold over six months.
Product stickiness is strengthening alongside this AI traction. At quarter-end, 84% of customers used two or more products, 55% used four or more, and 9% used 10 or more, up from just 6% a year earlier. For fiscal 2026, Datadog guided for revenues of $4.06 billion to $4.1 billion, implying 18-20% growth, with first-quarter 2026 guidance pointing to 25-26% growth. Whether the broader enterprise ramp can sustain that trajectory remains the key variable for DDOG's upside story.
How Do Dynatrace and Elastic Stack Up?
Datadog's AI-driven enterprise expansion puts it ahead of key rivals Dynatrace and Elastic in terms of growth pace. Dynatrace posted third-quarter fiscal 2026 revenues of $515 million, up 18% year over year, with ARR reaching $1.97 billion — up 20% year over year — and net new ARR of $75 million, marking the third consecutive quarter of double-digit net new ARR growth. Dynatrace's large-customer momentum is building, but its growth rate trails Datadog's 29%.
Meanwhile, Elastic reported third-quarter fiscal 2026 revenues of $450 million, up 18% year over year, with AI customers surpassing 3,000 and enterprise accounts with over $100,000 in ACV rising 14% to 1,660. Elastic's AI traction is notable, yet its enterprise customer base remains smaller. Across all three, AI is the common growth engine, though Datadog leads in scale and deal velocity.
DDOG’s Price Performance, Valuation & Estimates
Shares of DDOG have lost 13.3% in the past six-month period compared with the Zacks Internet - Software industry’s decline of 20.4%.
DDOG’s 6-Month Price Performance
From a valuation standpoint, Datadog appears overvalued, trading at a forward 12-month price-to-sales ratio of 9.91X compared with the broader Zacks Internet - Software industry's forward sales multiple of 3.99X. DDOG carries a Value Score of F.
The Zacks Consensus Estimate for DDOG’s 2026 revenues is pegged at $4.08 billion, suggesting 19.17% year-over-year growth. The consensus mark for 2026 earnings is pegged at $2.12 per share, indicating a 3.41% increase from the previous year.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
The Zacks Analyst Blog Highlights Datadog's, Dynatrace and Elastic
For Immediate Release
Chicago, IL – March 6, 2026 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Datadog's (DDOG - Free Report) , Dynatrace (DT - Free Report) and Elastic (ESTC - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
AI Push Boosts Enterprise Clientele: More Upside Ahead for Datadog?
Datadog's fourth-quarter 2025 results delivered a compelling case for the cloud observability platform's deepening relevance in an AI-driven enterprise landscape. Revenues climbed 29% year over year to $953 million, surpassing the top end of its own guidance, while full-year bookings reached a record $1.63 billion, up 37% year over year, including 18 deals over $10 million in total contract value.
Growth excluding AI-native customers accelerated to 23% year over year compared with 20% in the prior quarter, confirming that demand improvement was broad-based and not concentrated in a single cohort. This signals that Datadog's AI-era relevance is permeating the wider enterprise market rather than relying solely on a narrow segment.
The enterprise opportunity appears particularly underpenetrated. As of December 2025, 48% of the Fortune 500 are Datadog customers, yet the median ARR for those accounts remains below half a million dollars — pointing to substantial room for expansion within existing relationships. Customers generating more than $100,000 in ARR reached 4,310, representing approximately 90% of total ARR, while remaining performance obligations rose 52% to $3.46 billion, driven by a higher mix of multiyear enterprise contracts.
AI-native customer momentum remains a distinct tailwind. Datadog counts 14 of the top 20 AI-native companies as customers, with approximately 650 firms in this cohort growing at rates that significantly outpace the rest of the business. MCP server tool calls grew 11-fold in the fourth quarter compared to the third quarter, while more than 1,000 customers are now using Datadog's AI observability product, with usage increasing tenfold over six months.
Product stickiness is strengthening alongside this AI traction. At quarter-end, 84% of customers used two or more products, 55% used four or more, and 9% used 10 or more, up from just 6% a year earlier. For fiscal 2026, Datadog guided for revenues of $4.06 billion to $4.1 billion, implying 18-20% growth, with first-quarter 2026 guidance pointing to 25-26% growth. Whether the broader enterprise ramp can sustain that trajectory remains the key variable for DDOG's upside story.
How Do Dynatrace and Elastic Stack Up?
Datadog's AI-driven enterprise expansion puts it ahead of key rivals Dynatrace and Elastic in terms of growth pace. Dynatrace posted third-quarter fiscal 2026 revenues of $515 million, up 18% year over year, with ARR reaching $1.97 billion — up 20% year over year — and net new ARR of $75 million, marking the third consecutive quarter of double-digit net new ARR growth. Dynatrace's large-customer momentum is building, but its growth rate trails Datadog's 29%.
Meanwhile, Elastic reported third-quarter fiscal 2026 revenues of $450 million, up 18% year over year, with AI customers surpassing 3,000 and enterprise accounts with over $100,000 in ACV rising 14% to 1,660. Elastic's AI traction is notable, yet its enterprise customer base remains smaller. Across all three, AI is the common growth engine, though Datadog leads in scale and deal velocity.
DDOG’s Price Performance, Valuation & Estimates
Shares of DDOG have lost 13.3% in the past six-month period compared with the Zacks Internet - Software industry’s decline of 20.4%.
DDOG’s 6-Month Price Performance
From a valuation standpoint, Datadog appears overvalued, trading at a forward 12-month price-to-sales ratio of 9.91X compared with the broader Zacks Internet - Software industry's forward sales multiple of 3.99X. DDOG carries a Value Score of F.
The Zacks Consensus Estimate for DDOG’s 2026 revenues is pegged at $4.08 billion, suggesting 19.17% year-over-year growth. The consensus mark for 2026 earnings is pegged at $2.12 per share, indicating a 3.41% increase from the previous year.
Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote
DDOG stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.