Mizuho Securities has adjusted its price target for Datadog (DDOG, Financial), reducing it from $165 to $125 while maintaining an "Outperform" rating. This revision is part of a broader preview of the large-cap software sector for the first quarter, reflecting recent market dynamics and sector trends.
The quarter experienced solid performance with strong demand for cybersecurity solutions and increased adoption of generative artificial intelligence. However, data related to public cloud services and consumption showed mixed results, indicating potential volatility in upcoming earnings reports.
Looking forward, Mizuho anticipates a "very choppy" outlook for Q2 revenues across the software industry, citing recent contractions in comparable company valuations and an increased risk of recession as key considerations.
