UBS analysts highlight OpenAI’s parallel use of Datadog (DDOG) and privately-held Chronosphere for monitoring GPU workloads. While the development of an in-house tool seems unlikely, increased reliance on Chronosphere could potentially impact Datadog’s pricing power. Despite this challenge, UBS maintains a “buy” rating on Datadog, raising its price target from $140 to $165. The firm anticipates mid-20% revenue growth and stable margins in the short term. Datadog’s recent addition to the S&P 500 underscores its strong market position in observability. However, changes in OpenAI’s spending allocations could pressure Datadog’s fees. Investors should closely monitor usage trends—if volume increases surpass customer migration impacts, Datadog could see revenue growth before any significant loss in market share. This strategic insight emphasizes the importance of following upcoming shifts in platform usage for effective investment decisions.
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