Shares of monitoring and analytics platform specialist Datadog (NASDAQ:DDOG) jumped higher on Friday, rising about 10% as of 2 p.m. EDT.
The stock's rise comes as one analyst boosted his price target for the stock. In addition, overall bullishness on the Street for tech stocks likely helped as well.
Barclays analyst Raimo Lenschow, who has an overweight rating (similar to a buy rating) on the growth stock, increased his 12-month price target for Datadog shares from $107 to $126. This updated price target represents about 12% upside from where the stock is trading at the time of this writing. It also reflects the analyst's expectation for upbeat news from U.S. enterprise-facing software companies when they report their latest quarterly results during earnings season. Lenschow says his industry channel checks point to an improving environment for information technology (IT) spending.
Also fueling the stock's gain on Friday is probably the strong momentum in the overall market -- particularly among tech stocks. As of this writing, the Nasdaq Composite was up 1.2%.
When Datadog reported its second-quarter results in early August, management guided for third-quarter revenue to come in between $143 million and $145 million. The midpoint of this guidance range implies 50% year-over-year revenue growth.
"COVID-19 has illuminated the need to be digital-first and agile, as well as the cloud as the IT architecture of choice to achieve these outcomes," said Datadog CEO Olivier Pomel in the company's second-quarter earnings release.