Datadog (DDOG) reported "very strong" financial results for Q3, with revenue, non-GAAP operating income, and free cash flow all surpassing analyst expectations, BofA Securities said in a Thursday note.

Datadog also significantly raised its full-year 2025 revenue guidance, now forecasting year-over-year growth of 26.2%, up from 23.6% previously, according to the report.

BofA also noted renewed engagement with OpenAI and rising adoption among other major artificial intelligence companies, alongside improving usage trends across traditional enterprise clients.

Key metrics reflected strong momentum, with remaining performance obligations up 53% year-over-year, $100,000-plus customers rising 16% to 4,060 -- the highest net additions since early 2022 -- and security revenue growth accelerating to the mid-50% range, BofA said.

The firm maintained its Buy rating on the stock while raising its price target to $215 from $180.

Datadog shares were down 4.7% in recent trading.

Price: 182.08, Change: -8.75, Percent Change: -4.58