Datadog Inc (NASDAQ:DDOG) shares are trading lower Tuesday after analysts at Guggenheim downgraded the stock from Neutral to Sell, setting a new price target of $105.
What To Know: Guggenheim expects OpenAI to scale back its usage of Datadog's services in favor of more cost-efficient, internally managed observability tools. The analysts project a step-down in revenue contribution from OpenAI, with annual recurring revenue (ARR) potentially falling from an estimated $240 million at the end of the second quarter to $160 million in the third quarter and $80 million in the fourth. If this scenario plays out, Datadog's AI-native cohort would represent less than 7% of total ARR exiting 2025, a meaningful decline from current levels.
