The latest stock of the S&P 500 has climbed 315% since its IPO 2019, and this is a purchase at the moment, according to Wall Street

• Datadog has obtained admission to the S&P 500 index, one of the 5 companies to reach the note so far in 2025.

• The company’s cloud surveillance and safety platform is a leader in the field, with a long experience of industry distinctions.

• Despite its impressive history of growth, Wall Street always believes that action is a purchase.

• 10 actions that we love better than Datadog ›

THE S&P 500 is largely considered to be the most complete gauge on the American stock market, made up of the 500 main companies listed on the country. Given the in -depth scope of the companies that make up the index, it is praised as the most reliable reference in the overall performance of the stock markets. To be considered for admission to the S&P 500, a company must meet the following criteria:

• Be an American business

• Have a market capitalization of at least $ 20.5 billion

• Be very liquid

• Have at least 50% of its actions in circulation available for trading

• Be profitable on the basis of the generally accepted accounting principles (GAAP) during the last quarter

• Be profitable in the previous four quarters

Data doctor (Nasdaq: dog) is the latest addition to the S&P 500, which should join the reference on July 9. Since its initial public offer (IPO) at the end of 2019, Datadog firmly beat the market, generating 315% gains, against only 109% for the S&P 500 (to date). The gains in the share price were fed by its solid underlying fundamentals, because its income jumped 694% and net profit increased by 2,670%.

However, despite the impressive performance of the action and the solid history of business growth, many believe that the track to come is long for Datadog. Let us examine the opportunity to come and why Wall Street considers the action a strong purchase despite its premium evaluation.

Digital transformation is underway, driven by the continuous adoption of cloud computing and the growing use of artificial intelligence (AI). Many companies greatly depend on their digital presence, and they need a way to permanently monitor their websites, applications, servers and other cloud -based systems to ensure that they remain operational.

This is where Datadog is at stake. The company’s sophisticated surveillance and analysis platform continuously follows the cloud-based commercial systems, deals with millions of data points every hour and informs problems of problems before resulting in critical arrest times. The software tools as a (SaaS) service of Datadog go further, arriving at the root of the problem to help prevent it from recurring.

Datadog has a long list of industry distinctions that underline the strength of its surveillance and security solutions. He was selected as a leader in the 2024 Magic Quadrant by Gartner For observability platforms. He was also appointed in the Fork Wave report for artificial intelligence ops platforms (AIOPS) for the second quarter of 2025. There are more examples, but you get the point.

Don’t believe me. Datadog’s most recent results paint a convincing image. In the first quarter, revenues of $ 762 million increased by 25% from one year to the next, which resulted in an adjusted share per share (BPA) of $ 0.46. Perhaps also important, the available cash flows of the company continue to walk, increasing at $ 244 million, an increase of 30%.

Solid financial results were fed by an equally robust commercial execution. Datadog customers increased to 30,500, up 9%, while customers spending $ 100,000 in annual recurring income (ARR) jumped from 13% to 3,770. In addition, existing customers broaden their relations:

• 83% of customers use two or more products, compared to 82%.

• 51% use four or more products, compared to 47%.

• 28% use six or more products, compared to 23%.

• 13% use eight or more products, compared to 10%.

This terrestrial and expelled strategy, combined with the introduction of new products – in particular those focused on the adoption of AI – augurs well from the future of Datadog.

Datadog lowered his advice earlier this year in response to rates on and out, but Wall Street remains optimistic. Of the 46 analysts that covered the stock so far in July, 38 note a purchase or a strong purchase, 8 label, and not one recommends the sale.

Loop Capital analysts are among the most optimistic, maintaining a purchase note and a price target of $ 200 on action, which suggests a 48% increase in investors, compared to the action price of the action on Wednesday. Analysts cite Datadog’s growth trajectory and the increase in the total addressable market (TAM) – which, according to the company, will reach $ 175 billion by 2034 – as the basis of their optimistic appeal. In addition, they believe that the available cash flows from Datadog will reach $ 7.9 billion over the next decade, which makes it possible to illustrate the long -term growth potential of the company.

To be clear, Datadog has never been cheap. The action is currently sold only 76 times the revenues of next year and 14 times the sales of next year. However, the most commonly used evaluation measures have trouble with high growth companies, and Datadog is not different. When measured using the more appropriate price / benefit / growth ratio (PEG), the multiple is 0.4; Any number less than 1 is the standard for a undervalued stock.

Given its long history of growth, strong secular tail winds and the bullish take of Wall Street, I would submit that Datadog is a purchase.

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Danny Vena has positions in Datadog. The Motley Fool has positions and recommends Datadog. The Motley Fool recommends Gartner. The Motley Fool has a policy of disclosure.

The most recent stock of the S&P 500 has climbed 315% since its IPO 2019, and this is a purchase at the moment, according to Wall Street has been initially published by the Motley Fool