Datadog's (DDOG) Q2 results exceeded analyst expectations with 28% year-over-year revenue growth driven by customer expansion, multi-product adoption and low churn, Wedbush said in a note emailed Friday.

The security product suite surpassed $100 million in annual recurring revenue as customers adopted new offerings, including artificial intelligence-driven security tools, according to the note.

The company increased its full-year revenue guidance on growth expectations due to cloud migration, digital transformation, and increasing AI adoption across small-to-medium business, mid-market, and enterprise clients, Wedbush said.

The firm maintained an outperform rating on the stock with a $170 price target.

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