Post by : Badri Ariffin

Datadog is poised for a robust conclusion to 2025, projecting fourth-quarter earnings that exceed Wall Street estimates, driven by the growing adoption of artificial intelligence and cloud technologies.

The cloud-security and monitoring firm anticipates revenue in the range of $912 million to $916 million for Q4, outstripping analysts' consensus of $887.27 million. Their adjusted earnings per share are expected to be between 54 to 56 cents, whereas estimates hovered around 46 cents.

Following this optimistic forecast, Datadog's shares surged nearly 10% in premarket trading, contributing to an 8.5% year-to-date gain. Investors are reacting positively to the strong demand for the company's AI-enhanced monitoring and security tools, which assist businesses in tracking devices, managing access controls, and ensuring real-time protection of their cloud infrastructure.

The company has experienced impressive growth in recent quarters. In Q3, Datadog reported a revenue of $885.65 million, marking a 28% year-over-year increase, substantially beating analyst estimates of $852.78 million. Adjusted earnings per share reached 55 cents, surpassing expectations of 47 cents.

Since its inclusion in the S&P 500 in July, Datadog has expanded its presence in the corporate sector, with notable clients such as Shell, PayPal, and Comcast. Analysts observe that the interplay of increasing AI adoption and ongoing cloud migration is driving demand for tools capable of monitoring and securing increasingly intricate IT ecosystems.

With a promising project pipeline and consistent enterprise adoption, Datadog appears well-equipped to capitalize on the surge of AI-driven cloud growth, offering a positive outlook for both investors and businesses in need of advanced security solutions.

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