DataDog Stock Rises After S&P 500 Inclusion Announcement

DataDog (DDOG) shares saw an impressive increase of over 15% on Thursday, buoyed by the announcement that Cloud of Survival Company will join the S&P 500 Index on July 9th.

DDOG is stepping in for Juniper Networks following Hewlett Packard Enterprise’s $13.4 billion acquisition of the latter last week.

With this latest uptick, DataDog’s stock has surged nearly 90% compared to its lows in April.

Being added to the S&P 500 is significant for DataDog, bringing immediate buying pressure from passive index funds and ETFs that are required to hold its constituents.

Funds that track the S&P 500 must include its components, which could indeed amplify demand for DDOG shares during the latter half of 2025.

Moreover, inclusion in the index heightens DataDog’s visibility and stature among institutional investors. This move indicates the company’s solid financial well-being and market leadership, potentially drawing in a broader investor base and increasing analyst coverage.

Though the initial price boost might not last, enhanced perceptions and institutional ownership could lead to greater liquidity and long-term stability for DataDog stocks.

Analysts at TD Cowen maintained a “buy” rating for DataDog today, recognizing its future position in the S&P 500. However, they’ve adjusted their price target slightly downward to $150, just below its current trading level.

This suggests that investment experts believe much of the positive news is already reflected in the stock price. Consequently, any signs of cloud spending slowdowns or margin pressures might prompt a reassessment of ratings.

Investors should also be aware that Cloudstock’s current revenue multiples are remarkably high, approaching 600 times, making it seem overvalued at this point.

It’s not just Wall Street that’s taking note of DDOG stock evaluations; the consensus rating for DataDog remains a “strong buy,” yet the average target of around $140 indicates a possible downside of 10% going forward.