Datadog (DDOG) stock has already been a blockbuster investment in 2026, but senior Bernstein analyst Peter Weed believes the rally still has room to run. In a research note this morning, Weed upgraded the cloud monitoring company to “Outperform” and raised his price target to $350, indicating potential upside of another 35% from current levels.
As of writing, Datadog shares are trading at roughly twice their price at the start of this year.
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www.barchart.comWhat Made Bernstein Upgrade Datadog Stock
Weed’s upgrade reflects a reassessment of how quickly Datadog’s artificial intelligence (AI) clients can expand. He had previously questioned whether enterprise budgets, implementation hurdles, and eventual consumer saturation would restrain spending growth heading into 2027.
However, “our imagination clearly failed us,” the analyst told clients.
Bernstein’s alternative data now suggests enterprise token consumption increased at a sequential pace of at least 50% among the largest AI labs, potentially growing even faster at smaller AI-native businesses.
That strengthens the case for greater demand for Datadog’s monitoring tools as customers scale their workloads. Consumer agents such as Muse and Dots offer another potential driver, prompting Weed to reconsider how much runway the AI spending boom and DDOG shares still have.
Bernstein Raised Its Earnings Estimates for DDOG
Bernstein also raised its 2026 earnings forecast for Datadog to $2.82 per share, calling for a further increase to $4.00 next year.
Importantly, those revisions do not assume an additional improvement in the company’s traditional customer base. Weed sees that as a potential cushion: greater consumer engagement with AI agents could increase monitoring requirements across established internet and commerce businesses.
He also highlighted cybersecurity demand and Scout v1.0, DDOG’s site reliability engineering AI agent, for the bullish view.
With cloud operations teams facing an influx of code, these products could create demand beyond the firm’s revised assumptions, giving the bullish thesis several possible sources of further upside.
How Wall Street Recommends Playing Datadog
While not nearly as bullish as Bernstein, other Wall Street firms also favor sticking with DDOG stock heading into 2027.
The consensus rating on Datadog sits at “Strong Buy” currently, with the mean price target of about $297 indicating significant upside potential from here.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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