Datadog Raises Q4 Forecast on AI-Driven Cloud Demand

Datadog is setting the stage for a strong finish to 2025, forecasting fourth-quarter earnings above Wall Street expectations as businesses increasingly adopt artificial intelligence and cloud technologies.

The cloud-monitoring and security company expects revenue between $912 million and $916 million for the final quarter, surpassing analysts’ consensus of $887.27 million. Its adjusted earnings per share are projected at 54 to 56 cents, compared with estimates of 46 cents.

Datadog’s shares jumped nearly 10% in premarket trading after the forecast, building on an 8.5% gain so far this year. Investors are responding to strong demand for the company’s AI-driven monitoring and security tools, which help companies track devices, manage access controls, and ensure real-time protection of their cloud infrastructure.

The company has seen rapid growth in recent quarters. In Q3, Datadog reported revenue of $885.65 million, a 28% increase year-over-year, beating analyst estimates of $852.78 million. Adjusted earnings per share came in at 55 cents, higher than the expected 47 cents.

Since joining the S&P 500 in July, Datadog has strengthened its footprint in the corporate world, counting major firms like Shell, PayPal, and Comcast among its clients. Analysts note that the combination of rising AI adoption and continued cloud migration is fueling demand for tools that can monitor and secure increasingly complex IT environments.

With a robust pipeline and steady enterprise adoption, Datadog appears well-positioned to ride the wave of AI-driven cloud growth, signaling optimism for both investors and businesses seeking advanced security solutions.