Why Datadog, Inc. (DDOG) Went Down on Thursday

We recently compiled a list of the Weak Earnings, Outlook Drag Shares of These 10 Firms on Thursday. In this article, we are going to take a look at where Datadog, Inc. (NASDAQ:DDOG) stands against the other stocks.

The stock market finished firmer on Thursday, as investors cheered fresh inflation data and tariff updates that helped alleviate concerns about inflationary pressures and global trade tensions.

The Dow Jones rose by 0.77 percent, the S&P 500 increased 1.04 percent, while the Nasdaq jumped 1.50 percent.

Despite overall market gains, ten companies managed to register declines, mostly due to disappointing earnings performance, a weaker outlook, and downgraded ratings.

To come up with Thursday’s top losers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A close-up of a laptop with a software engineer coding on the monitor.

Datadog, Inc. (NASDAQ:DDOG)

Datadog, Inc. (NASDAQ:DDOG)’s share prices plummeted by 8.24 percent on Thursday to end at $135.89 each as investors disposed of positions in the company following a downgraded outlook from an investment bank.

In a statement, Wells Fargo gave Datadog, Inc. (NASDAQ:DDOG) a downgraded rating of “equal weight” from “overweight” previously, following its weak outlook for the first quarter and full year of 2025. The rating overshadowed its better-than-expected earnings performance last year, with net income expanding 278 percent to $183.7 million from $48.57 million in 2023.

The jump in net income was achieved despite poor fourth-quarter results, with net earnings for the quarter declining 15 percent to $45.59 million from $53.99 million.

For this year, Datadog, Inc. (NASDAQ:DDOG) said it expects revenues for the full year to settle between $3.175 billion and $3.195 billion, as well as adjusted earnings per share ranging between $1.65 and $1.7.

Overall DDOG ranks 7th on our list of Thursday’s top losers. While we acknowledge the potential of DDOG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DDOG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.