Datadog (DDOG) is expected to deliver "strong" Q4 results, but RBC Capital Markets said the company's conservative revenue and margin guidance for 2026 could weigh on shares in the near term while acting as a clearing event for investors.

The brokerage said in a Friday note that it expects Q4 revenue growth of around 28%, supported by continued momentum from non-AI native workloads, which RBC expects to carry into 2026.

Investor attention is likely to focus on Datadog's initial 2026 revenue guidance, with consensus growth expectations of roughly 21.1% considered too high by the analysts. RBC's own estimate for 2026 growth is 19.8%, while market expectations and bear-case estimates are lower.

The company's management is also expected to use its upcoming analyst day to highlight artificial intelligence use cases, the competitive landscape, security offerings, go-to-market strategy and margin commentary.

Analysts do not expect new long-term targets but guidance on GM trajectory, ARR breakdown and other structural metrics may be discussed.

RBC maintained its outperform rating on Datadog and lowered its price target to $150 from $175.

Price: 112.20, Change: +0.51, Percent Change: +0.46