Datadog Inc. ( DDOG ) shares are trading lower Wednesday following a report that the company is considering acquiring GitLab Inc. ( GTLB ) , valued at approximately $8 billion.

What Happened: Datadog ( DDOG ), valued at $44 billion, offers cloud monitoring software and allows clients to analyze their entire IT infrastructure in real time. Both companies have declined to comment on the ongoing discussions, while Alphabet, holding a 22.2% voting stake in GitLab ( GTLB ), also had nothing to say, for now, on the matter.

Needham analyst Mike Cikos suggested that while AWS or Google Cloud might seem like more obvious buyers, a tie-up between GitLab ( GTLB ) and Datadog ( DDOG ) could be beneficial.

“GitLab has long been viewed as an attractive acquisition candidate, in our view. While we sense that investors view AWS or Google Cloud as more obvious buyout candidates, we are positive on a potential tie-up between GitLab ( GTLB ) and Datadog,” Cikos wrote in a note on Wednesday.

DDOG Price Action: Datadog ( DDOG ) shares were down by 7.35% at $121.16 at market close Wednesday, according to Benzinga Pro.

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