Datadog Shares Fall Nearly 12% as Technology Stocks Sell Off

The Nasdaq Composite dropped 3% on Friday, its worst day since June, as investors exited tech stocks. Intel's INTC shares fell over 30% after its Q3 earnings missed estimates. Other semiconductor stocks, including AMD, QCOM, and SNDK, also declined significantly.

Dan Ives of Yorkville Ives noted AI's disruption in tech earnings, with Amazon (AMZN), Intel (INTC), and SanDisk (SNDK) shares declining after their quarterly results. U.S. equities fell, with the Nasdaq-100 tracking QQQ down 2.69%. INTC dropped over 30%, its worst day since 1979. Ives expects AI spending to pay off by 2027, citing cloud growth and capital expenditure as key metrics.

Datadog shares fell 5.5% to $263.01 despite analyst upgrades. Wells Fargo, UBS, and Oppenheimer raised price targets to $325, $320, and $330 respectively, averaging an 11.4% increase. The sell-off may reflect profit-taking or overpriced expectations. Analysts maintain positive ratings, but market reaction suggests caution about near-term momentum.

Upwind, a San Francisco-based AI cybersecurity startup, raised $400M in Series C funding at a $3.8B valuation. The round was led by Bessemer Ventures and followed a rejected acquisition offer from Datadog. Upwind reported $90M in projected annual recurring revenue, valuing it at over 40 times its forecast ARR. The company aims to remain independent despite acquisition interest.

Datadog (DDOG) is set to report Q3 results on November 4. UBS raised its price target to $320, citing AI observability growth but warning of elevated valuation and mixed enterprise spending trends. Shares up 15% since Q2 results, trading at 17x 2027 revenue and 57x free cash flow. UBS notes potential upside from OpenAI spending but cautions on core revenue growth stabilization.

UBS raised Datadog's price target to $320 from $280, maintaining a Buy rating. The firm cited AI observability and OpenAI spending as potential growth drivers, but noted risks like stabilizing revenue growth. Datadog shares were down 0.61% in premarket trading.