Is it advisable to purchase Datadog stock prior to August 7th?
Datadog, the cloud-based monitoring and analytics platform, has reported a robust growth in its AI-powered solutions, with the second quarter of 2025 revenue jumping 28% year-over-year to $827 million. This growth is largely attributed to expansion among enterprise clients using Datadog's AI-enabled cloud monitoring and security platform.
Significant Customer Base Expansion
The company has seen a significant increase in its customer base, particularly among enterprises that are scaling their AI usage. As of the end of the first quarter, approximately 30,500 customers were using Datadog's services, marking a notable growth compared to the previous year. Moreover, about 3,850 customers now have an annual recurring revenue of over $100,000, a 14% increase from the previous year.
New AI-Related Products and Features
Datadog has rolled out over 125 new AI-related products and features in the quarter, showcased at their DASH conference. These innovations are designed to enhance the company's AI capabilities and provide more value to its customers. One such product is OpenAI Monitoring, an observability product specifically for businesses using LLMs from OpenAI. Another notable addition is the LLM Observability for large language models.
Full-Year 2025 Revenue Guidance
Looking ahead, Datadog projects continued revenue growth for the remainder of 2025, expecting full-year revenue between $3.312 billion and $3.322 billion. While exact revenue contribution from AI alone is not separately disclosed, the company clearly positions AI capabilities as a major driver of customer expansion and revenue gains.
The Future of Datadog's AI Business
Based on its rapidly growing AI business, Datadog's future looks very bright. The momentum in Datadog's AI revenue is expected to continue into the second quarter, potentially leading to an upward revision to the 2025 forecast on Aug. 7, when the company is scheduled to release its operating results for the second quarter of 2025.
Investors who are looking for gains over the next few months should probably avoid Datadog stock due to its elevated valuation. However, those who are willing to hold Datadog stock for the next five years or more could still do well due to the potential growth of its AI business.
Datadog's stock is currently trading at a price-to-sales (P/S) ratio of 19, and its total revenue for the first quarter of 2025 was $762 million. Another important AI number investors should watch on Aug. 7 is the updated figure for the number of customers using Datadog's AI products.
In summary, Datadog's current market trend shows strong growth driven significantly by AI and cloud demand. The company's AI business is a key component of its overall growth, but specific AI revenue contribution figures are not detailed in available reports. Despite this, Datadog's expectations for AI business growth remain optimistic, with AI innovations appearing integral to its market strategy and revenue forecast for 2025.
[1] Datadog Q2 2025 Results
[2] Datadog Q2 2025 Earnings Call Transcript
[3] Datadog DASH Conference 2025
[1] The growth in Datadog's AI-powered solutions is by no means limited to revenue, as the company has also expanded its customer base significantly, particularly among enterprises that are scaling their AI usage.
[2] To support this growth, Datadog has launched over 125 new AI-related products and features, showcasing their commitment to harnessing technology to enhance data and cloud computing for their customers, further marketing their position as a major investor in competent AI industry development.
