12:29 PM EST, 11/06/2025 (MT Newswires) -- Datadog's ( DDOG ) shares soared on Thursday as the software maker lifted its full-year outlook amid the ongoing boom in artificial intelligence adoption, with its third-quarter results surpassing Wall Street's projections.

For 2025, the company now expects adjusted per-share earnings of $2 to $2.02, up from its prior estimate of $1.80 to $1.83. Revenue is now guided between $3.386 billion and $3.39 billion, compared with its previous outlook of $3.31 billion to $3.32 billion. Analysts surveyed by FactSet expect non-GAAP EPS of $1.83 and sales of $3.53 billion.

The stock was up 21% intraday, boosting its gain for the year to 30%. Datadog ( DDOG ) provides an observability and security platform for cloud applications

"There is no change to our overall view that digital transformation in cloud migrations are long-term secular growth drivers of our business," Chief Executive Olivier Pomel said during an earnings call, according to a FactSet transcript. "We are advancing rapidly in AI where we are incredibly excited about our opportunities."

Datadog ( DDOG ) offered an upbeat outlook for the ongoing quarter. It expects non-GAAP EPS of $0.54 to $0.56 and revenue between $912 million and $916 million, compared with the prior-year quarter's $0.49 and $737.7 million, respectively. Analysts are looking for non-GAAP EPS $0.45 and sales of $888.5 million.

"The market opportunity in cloud and AI is expected to grow rapidly into the trillions of dollars," Pomel told analysts. "So, we're moving fast to help our customers develop, deploy, and grow into the cloud and into the AI world."

Non-GAAP EPS jumped to $0.55 for the September quarter from $0.46 a year earlier, ahead of the consensus of $0.45. Revenue surged 28% to $885.7 million, while analysts expected $852.8 million.

Billings climbed 30% to $893 million, Chief Financial Officer David Obstler told analysts on the call. Remaining performance obligations, or RPO, advanced annually by 53% amid strong bookings, according to Obstler.

"Overall, we saw sequential usage growth from existing customers in (the third quarter) that was higher than our expectations and the strongest in 12 quarters in our non-AI native customer base," he said.

Wedbush Securities analyst Daniel Ives described the most recent period as "another positive quarter." The brokerage reiterated its outperform rating on the stock, while raising its price target to $215 from $170.

Datadog ( DDOG ) "capitalizes on demand for mission-critical use cases around cloud migration and digital transformation projects especially with AI adoption creating greater demand for end-to-end data observability offerings," Ives said in a note e-mailed to MT Newswires.

Price: 188.96, Change: +33.98, Percent Change: +21.93