Datadog Inc. DDOG just secured its spot in the S&P 500 Index. And while the headlines are focused on the 10% surge during early trading on Thursday, Wedbush analyst Dan Ives sees a bigger story unfolding.
This isn’t just a ripple effect of rebalancing. It’s a validation of Datadog’s rising dominance in the AI-fueled observability game; the beginning of what could be a multi-quarter growth wave.
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S&P 500 Inclusion Lends ‘Incremental Confidence’
The addition is set to take effect July 9. It comes at a time when Datadog is firing on multiple cylinders. Its latest innovations in Bits AI — offering automated bug detection, traceable fix suggestions, and AI-enhanced monitoring — are directly addressing the enterprise demand for smarter DevOps. And with a strategic tie-up with OpenAI now in play, Datadog isn’t just riding the AI trend. It’s helping define it.
Dan Ives has bumped his 12-month price target from $140 to $170, citing “incremental confidence” in Datadog’s positioning. “Our recent checks are very strong,” Ives noted, highlighting the company’s ability to monetize elevated enterprise usage through a retooled go-to-market motion.
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Technical Signals Say The Rally Has Room
The technical backdrop echoes the bullish thesis. Datadog is now trading above all major moving averages — from its eight-day to its 200-day — underscoring persistent buying momentum. The 20-day and 50-day simple moving averages, at $127.77 and $117.79, respectively, are trailing significantly behind the current share price of $148+, further confirming trend strength.
The stock’s Relative Strength Index (RSI) has crossed 81, putting it in overbought territory — but in a way that suggests strong investor conviction rather than exhaustion. The Moving Average Convergence Divergence (MACD) indicator at 6.09 reinforces that momentum is accelerating, not stalling.
S&P 500 Is Fuel — Not The Finish Line
Datadog’s market cap of $45 billion now earns it a seat at the passive capital table, opening the door to ETF flows and institutional exposure. But unlike some names that pop on index news and fade, Datadog appears to have fundamental horsepower behind the move.
With last year’s revenue climbing nearly 47% and product expansion continuing across AI and security observability, the company may just be scratching the surface of its total addressable market.
For investors wondering if they’ve missed the move, the charts and the fundamentals both suggest this may be the warm-up act.
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