Datadog (DDOG) provided "relatively conservative" 2026 guidance as the company continues to navigate a fast-changing AI-driven landscape, even as demand for cloud migration and digital transformation projects remains solid, Wedbush Securities said Wednesday in a report.

The company projected 2026 earnings of $2.08 to $2.16 per share on $4.06 billion to $4.10 billion in revenue, below Wall Street expectations for $2.33 in EPS on $4.11 billion in revenue, Wedbush said. Datadog expects at least 20% growth from its core business, excluding its largest customer, the report said.

In Q4, the company's six-figure spend customer base rose 19% to 4,310 customers, reflecting continued strength across observability, log management, and infrastructure monitoring, the report said.

Wedbush lowered its price target on Datadog stock to $190 from $215 and reiterated its outperform rating.

Datadog shares fell 4.4% in Wednesday trading.

Price: 124.01, Change: -5.66, Percent Change: -4.36