Bernstein Says Datadog’s Q2 May Mark a Growth Peak as H2 Slowdown Comes Into View

Datadog posted a strong second quarter in 2026, with revenue reaching $1.121 billion, up 35.6% year over year and accelerating 340 basis points sequentially, its fastest pace since 2022. The company beat guidance by $46 million and lifted the midpoint of its full-year outlook by more than three times. Even so, Bernstein argues the strength may represent a near-term top rather than the start of another leg higher. In Bernstein’s view, Datadog’s growth is likely to slow modestly in the second half, with revenue expansion falling about 200 basis points to roughly 33%. The firm points to lower usage from what it believes is Datadog’s largest AI customer, OpenAI, after a nine-figure renewal signed early in Q3. Management, according to the report, fully de-risked that account in Q4 guidance by assuming only the contractual minimum spend and no overage. The note also flags softer AWS SSO web traffic data as a possible sign of a temporary Q4 air pocket in non-AI demand. Bernstein still frames that issue as one-off rather than structural. It kept an Market Perform rating on Datadog with a $237 price target, saying the main concern is not business quality but valuation and crowded positioning. The report’s bottom line is simple: Datadog remains a good company, but the stock may already reflect most of the good news expected over the next 12 to 18 months.