Bank of America reiterated its buy rating and $305 price objective on Datadog after the company's largest customer, widely believed to be OpenAI, announced a usage pullback that triggered a 19% stock selloff. Analysts Koji Ikeda and George McGreehan argued the market is treating one account's slowdown as a company-wide problem, noting that growth outside the largest customer has accelerated for four straight quarters to the high-20% range. The third-quarter guidance implies roughly $19 million of new revenue, a sharp drop from the $115 million added in the second quarter, but BofA believes management built maximum caution into the number around the single customer pullback rather than a broad slowdown. The firm's $305 target, set weeks before the earnings report, implies 33% upside from the post-selloff close and is based on a 20.6 times multiple of expected 2027 revenue, a premium over infrastructure software peers justified by Datadog's projected 19% revenue growth in 2027 against an 11% peer average.
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