On August 27, Datadog rose 3.22% in pre-market trading, trading at $234.25/share, with turnover of $1.2515 million.

On the news front, The Information reported that Palo Alto Networks CEO Nikesh Arora explored acquiring Datadog and identity authentication company Okta over the past 18 months, aiming to expand its product portfolio to address emerging AI threats. After those potential deals fell through, Palo Alto purchased Okta competitor CyberArk for $25 billion in February and Datadog competitor Chronosphere for $3.35 billion in January. There is no indication that Palo Alto formally submitted an acquisition offer to Datadog, with these targets described as potential transaction directions under Arora's consideration.

The report highlights Datadog's strategic value in the cloud observability and AI security space, lifting market expectations of a potential acquisition premium. Additionally, Datadog's previously reported Q2 revenue of approximately $1.12 billion represented 36% year-over-year growth, with non-GAAP EPS of $0.65 beating estimates by over 10%. Multiple investment banks maintain buy ratings with price targets above $300.

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