Wolfe Research has expressed incremental optimism regarding the earnings potential of Datadog ($DDOG), fueled by OpenAI’s Codex, which is experiencing rapid adoption among developers. OpenAI recently announced that Codex reached 4 million active users, reflecting a significant surge as developers increasingly shift from competitors amid reported issues with Anthropic’s Claude Code and criticisms of Opus updates. The analyst’s investigation uncovered strong evidence that OpenAI utilizes $DDOG for tracing within the Codex stack, as recent public repository findings show OpenAI engineers referencing DDOG for monitoring and debugging, suggesting a deepening relationship that could lead to increased spending on Datadog as Code usage expands.
OpenAI: OpenAI is an AI research organization developing advanced models and tools like ChatGPT and Codex, a coding agent for developers. Recent Codex updates include memory features, numerous plugins, desktop control, and multi-agent support, enhancing its role as a development assistant competing with Claude Code. OpenAI engineers use Datadog for tracing and debugging issues in the rapidly scaling Codex product.
Datadog: Datadog is a cloud observability and security platform that monitors applications, including AI and LLM workloads with specialized integrations. It serves as one of OpenAI’s largest customers, with recent pull requests and commit messages in OpenAI’s Codex repository confirming its use for tracing requests through the stack. This supports Datadog’s benefits from AI infrastructure expansion amid Codex growth.
Sam Altman: Sam Altman is the CEO of OpenAI, leading the advancement of AI technologies including ChatGPT and Codex. He recently tweeted about Codex’s rapid momentum, likening it to ChatGPT’s breakthrough and highlighting its value on affordable plans. His statements align with OpenAI’s vocal emphasis on coding as a strategic pillar.
Wolfe Research: Wolfe Research is a premier independent sell-side equity research firm specializing in macro and fundamental analysis across sectors like technology and industrials. The firm recently analyzed OpenAI’s public Codex repository, uncovering evidence of Datadog’s use for tracing in Codex development. This finding prompted their incrementally bullish stance on Datadog ahead of earnings.
`json
{
“Codex Momentum”: “Codex is experiencing rapid adoption among developers, supported by ecosystem insights indicating a shift from competitors.”,
“AI Coding Focus”: “OpenAI emphasizes coding tools like Codex as a primary strategic focus with continuous improvements for developer use.”,
“Competitor Issues”: “Anthropic’s Claude Code experiences service interruptions due to capacity limits, while Opus updates receive criticism as possible downgrades.”
}
`