DOCN vs DDOG Stock Comparison: AI Score, Valuation, Performance and Upside
DigitalOcean and Datadog are both cloud infrastructure companies but in very different segments with very different execution tracks. DigitalOcean provides compute infrastructure with declining NRR; Datadog provides monitoring software with best-in-class NRR and accelerating AI workload demand. Datadog is the clear quality leader — DOCN is the value play in a challenged segment.
This comparison highlights the difference between infrastructure commodity (DOCN) and software platform with AI tailwinds (DDOG) — Datadog's consumption growth model and LLM observability positioning make it the clearly superior business.
DOCN holds the edge across 4 of 5 key metrics in this comparison. DOCN leads on both 1-year return (+249.74%) and forward P/E quality (56.20x vs 79.83x for DDOG), a relatively favorable combination of momentum and valuation. On fundamentals, DDOG is growing revenue faster (35.60%), while DOCN maintains the higher operating margin (10.44%) — a classic growth-versus-profitability split. Analyst consensus implies meaningfully more upside for DOCN (+69.28%) than for DDOG (+20.34%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- want value cloud infrastructure exposure at a much lower valuation than Datadog
- believe GPU cloud and SMB AI workloads will reinvigorate DigitalOcean's growth trajectory
- are building a diversified cloud infrastructure position across multiple tiers
- are comfortable with slower growth and NRR pressure in exchange for improving profitability
- want the leading cloud observability platform with demonstrated 120%+ NRR
- believe AI workload monitoring (LLM observability) is a large new revenue layer
- value consumption-based pricing models that grow organically with customer cloud usage
- are comfortable paying a premium multiple for best-in-class software growth and retention
| Metric | DOCN | DDOG |
|---|---|---|
| AI scorei | 55.0 | 58.8 |
| AI ranki | #277 | #196 |
| Latest closei | $130.14 | $229.92 |
| 1M returni | +11.55% | -1.54% |
| 6M returni | +57.46% | +76.94% |
| 1Y returni | +249.74% | +68.06% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | DOCN | DDOG |
|---|---|---|
| 1Y ago | $34.97K (+249.7%) started 2025-09-18 | $16.81K (+68.1%) started 2025-09-18 |
| 5Y ago | $16.35K (+63.5%) started 2021-09-20 | $16.16K (+61.6%) started 2021-09-20 |
| 10Y ago | $30.62K (+206.2%) started 2021-03-24 | $61.23K (+512.3%) started 2019-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | DOCN | DDOG |
|---|---|---|
| Market capi | $12.17B | $85.09B |
| Trailing P/Ei | 47.05 | 473.96 |
| Forward P/Ei | 56.20 | 79.83 |
| Price/Salesi | N/A | 14.88 |
| EV/Revenuei | 13.86 | 20.52 |
| Analyst targeti | $175.20 | $285.18 |
| Target upsidei | +69.28% | +20.34% |
| Metric | DOCN | DDOG |
|---|---|---|
| Revenue growthi | 28.60% | 35.60% |
| Earnings growthi | -24.50% | 1498.50% |
| EPS growthi | -24.50% | +1498.50% |
| FCF margini | -2.36% | +26.51% |
| Operating margini | 10.44% | 0.67% |
| Profit margini | 23.27% | 4.48% |
| ROIC proxyi | 62.27% | 4.70% |
| Return on equityi | 62.27% | 4.70% |
| Dividend yieldi | N/A | N/A |
| Payout ratioi | 0.00% | 0.00% |
| Dividend growth streaki | N/A | N/A |
| Betai | 1.59 | 1.51 |
| Debt/equityi | 212.51 | 29.26 |
| Current ratioi | 1.31 | 3.21 |
| Quick ratioi | 1.14 | 3.10 |
Over the past year, DOCN and DDOG have moved weakly in the same direction (correlation of 0.20), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | DOCN | DDOG |
|---|---|---|---|
| 1Y | Growthi | +249.74% | +68.06% |
| CAGRi | +250.04% | +68.12% | |
| Volatilityi | 85.22% | 69.57% | |
| Sharpe ratioi | 1.83 | 1.02 | |
| Sortino ratioi | 3.38 | 1.76 | |
| Max drawdowni | 42.15% | 48.62% | |
| Current drawdowni | 28.21% | 20.21% | |
| Avg drawdowni | 11.59% | 20.55% | |
| Ulcer Indexi | 16.82% | 25.46% | |
| Max daily dropi | 13.28% | 19.03% | |
| Max wkly dropi | 25.18% | 18.04% | |
| 5Y | Growthi | +63.45% | +61.63% |
| CAGRi | +10.34% | +10.09% | |
| Volatilityi | 72.26% | 59.46% | |
| Sharpe ratioi | 0.43 | 0.38 | |
| Sortino ratioi | 0.66 | 0.58 | |
| Max drawdowni | 84.78% | 68.11% | |
| Current drawdowni | 28.21% | 20.21% | |
| Avg drawdowni | 62.47% | 37.26% | |
| Ulcer Indexi | 65.72% | 40.78% | |
| Max daily dropi | 24.79% | 19.03% | |
| Max wkly dropi | 29.16% | 23.41% | |
| 10Y | Growthi | +206.21% | +512.30% |
| CAGRi | +22.63% | +29.56% | |
| Volatilityi | 71.46% | 60.18% | |
| Sharpe ratioi | 0.58 | 0.65 | |
| Sortino ratioi | 0.88 | 1.01 | |
| Max drawdowni | 84.78% | 68.11% | |
| Current drawdowni | 28.21% | 20.21% | |
| Avg drawdowni | 57.40% | 30.18% | |
| Ulcer Indexi | 62.74% | 35.49% | |
| Max daily dropi | 24.79% | 19.03% | |
| Max wkly dropi | 29.16% | 30.02% |
| Category | DOCN | DDOG |
|---|---|---|
| Company | DigitalOcean Holdings, Inc. | Datadog, Inc. |
| Sector | Technology | Technology |
| Industry | Software - Infrastructure | Software - Application |
| Core business | DigitalOcean provides simplified IaaS cloud infrastructure to developers and SMBs, competing on simplicity and price against AWS and Azure. GPU cloud (Paperspace) and managed hosting (Cloudways) are recent additions expanding its product suite. | Datadog is the leading cloud-native observability platform providing infrastructure monitoring, APM, log management, security monitoring, and AI observability in a unified data platform. It charges on consumption (usage-based pricing), creating a direct correlation between customer cloud usage and Datadog revenue. Datadog's LLM Observability product monitors AI model performance, positioning it as the essential monitoring layer for AI applications. |
| Investor focus | Investors track net revenue retention, customer count growth, ARPU expansion, and free cash flow generation as DigitalOcean improves its profitability profile in a competitive market. | Investors track net revenue retention (historically 120%+), large customer ($1M+ ARR) additions, product adoption breadth (number of products per customer), and LLM observability early revenue as an AI growth catalyst. |
- Unique SMB/developer focus with products designed for simplicity vs enterprise cloud complexity
- GPU cloud via Paperspace addresses growing demand for SMB AI/ML workloads
- Positive free cash flow trajectory differentiating DOCN from most infrastructure competitors
- Best-in-class net revenue retention of 120%+ driven by consumption growth and cross-sell
- Unified platform spanning 30+ products reduces vendor fragmentation for DevOps and security teams
- LLM observability positions Datadog as the monitoring layer for AI model deployments
- Net revenue retention declining below 100% in some quarters — customers not expanding spend
- Large cloud providers improving their developer experience with simplified tiers
- Growth deceleration from COVID tailwinds has been sharper than the market expected
- Consumption-based model means revenue is sensitive to customer cloud usage fluctuations
- Premium valuation (50x+ revenue) requires sustained 25%+ growth to justify
- Competition from Dynatrace, New Relic, and Elastic in observability market
Want deeper AI forecasts?
This comparison page is public and free forever. Subscribers can unlock saved watchlists, full AI rankings, detailed forecasts, and interactive analysis tools.
Full valuation workup with AI Score, Monte Carlo forecast, and bull/bear case — free preview, premium data from $3.99.