New York, May 30, 2026, 10:03 EDT
Datadog shares closed out the holiday-shortened week with a sharp Friday rally, rising 9.8% to $247.35 after RBC Capital’s Matthew Hedberg lifted his price target to $250 from $219 and kept a Buy rating. The stock gained about 11.3% over the four trading sessions from May 22 to May 29, based on closing prices.
The timing matters because there is no Saturday trade to confirm the move. Nasdaq’s regular session runs Monday through Friday, and the exchange was also closed on May 25 for Memorial Day, leaving Friday’s close as the latest full-market read before trading resumes next week.
The rally came with a broader bid under technology shares. The S&P 500 rose 0.2% on Friday for its seventh straight gain, while the Nasdaq Composite also added 0.2%; for the week, the Nasdaq rose 2.4%, helped by renewed interest in artificial-intelligence-linked stocks.
RBC said Datadog was positioned to benefit from higher spending on observability, the software used to track whether applications, networks and servers are working and to find the source of failures. The firm also cited cloud migration and artificial-intelligence adoption, two areas that have kept investor attention on companies that monitor complex digital systems.
Datadog’s own May results gave that trade a base. The company reported first-quarter revenue of $1.006 billion, up 32% from a year earlier, with non-GAAP operating income of $223 million; non-GAAP means adjusted figures that exclude items such as stock-based compensation and acquisition-related costs.
Chief Executive Olivier Pomel said Datadog was helping customers deploy “modern, cloud-based, AI-enabled solutions.” The company also guided for second-quarter revenue of $1.07 billion to $1.08 billion and full-year 2026 revenue of $4.30 billion to $4.34 billion. SEC
On the earnings call, Pomel said Datadog saw AI use moving into production and called that shift “very real.” The company said more than 6,500 customers were sending data through one or more AI integrations; those customers were about 20% of total customers but represented about 80% of ARR, or annual recurring revenue. The Motley Fool
There was another late-week company item. Datadog and Carahsoft said on May 27 that Datadog for Government achieved FedRAMP High certification, a U.S. government cloud-security authorization for highly sensitive federal workloads. Emilio Escobar, Datadog’s chief information security officer, said it could bring Datadog into “previously restricted environments.” GlobeNewswire
The move was not isolated. Dynatrace, another observability software name, rose to $42.59 on Friday, and Elastic, which competes in search, logging and observability markets, climbed to $64.70. Their gains kept the read more sector-wide than company-only, though Datadog’s move was larger.
But the risk is that the stock has already priced in a lot of the good news. Datadog ended Friday just below RBC’s new $250 target, and high-multiple software — shares that investors value richly versus sales or profit — can fall quickly if AI spending slows, if large customers pull back, or if investors rotate into cheaper parts of the market.
The week ahead brings a scheduled Datadog appearance at Bank of America’s Global Technology Conference on June 3 at 3:30 p.m. EDT. Investors will look for any fresh comments on AI workloads, federal demand after FedRAMP High, and whether Friday’s price jump holds when the broader market reopens.
