DDOG dropped 22% after a large AI customer disclosed reduced future usage, despite beating Q2 revenue and earnings while raising its full-year outlook.
CoreWeave (CRWV) and Oracle (ORCL) each gained 13-14% over the same period, ruling out sector rotation or broad cloud weakness as the cause.
Customer concentration risk and a decelerating growth rate can keep a software stock repriced far longer than its underlying platform quality would suggest.
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Datadog stands alone in cloud software over the past month, with a company-specific catalyst carving a wide gap between its shares and every close peer. That gap is the whole story, and it flips the usual sector-rotation explanation on its head.

#Stock #ddog

Chief Executive Officer Olivier Pomel net sold 47,054 shares of Datadog, Inc. (NASDAQ:DDOG) on Aug. 19, 2026, as disclosed in a recent SEC Form 4 filing.
Metric
Value
Shares sold
47,054

#ddog

Datadog, Inc. (NASDAQ:DDOG) is a cloud infrastructure and application monitoring platform. Its shares are up by 102% over the past year and by 88% year-to-date. The shares closed a stunning 19% lower on August 6th after Datadog, Inc. (NASDAQ:DDOG) reported its second quarter earnings. On that same day, Cramer commented on the stock as the earnings hit the wires and called it a momentum play:
"I look at a company like DataDog, and DataDog, I'm going to be a little glib here by saying, people think it never misses. Now, when you go over DataDog line by line by line, and it's not that big. . .They're just momentum stocks, that people think, you know what, aren't so good."
As is the case with most software stocks, Datadog, Inc. (NASDAQ:DDOG)'s narrative is also about whether the firm will be able to stand on its own against the rise in AI platforms that enable businesses to develop their own software. On this front, the second quarter earnings provided key insights into the split between the bulls and the bears. During the quarter, Datadog, Inc. (NASDAQ:DDOG)'s revenue grew by 36% annually. The firm also raised its full year revenue per share guidance to $4.45 - $4.47 and its earnings per share outlook to $2.50 - $2.54. The positive aspects of the earnings led Datadog, Inc. (NASDAQ:DDOG)'s bulls to point out that the firm was experiencing significant tailwinds from AI catalysts.
However, the bears counter by pointing towards Datadog, Inc. (NASDAQ:DDOG)'s full year revenue outlook. While the firm increased the full year revenue guidance to $4.45 billion to $4.47 billion, this figure fell below the ***** yst estimates of $4.69 billion. Behind the miss was Datadog, Inc. (NASDAQ:DDOG)'s announcement that a major AI company was dialing down its usage. While Datadog, Inc. (NASDAQ:DDOG) didn't disclose the customer's name, some ***** ysts were worried about OpenAI reducing usage before the earnings. The bears use this development to argue that future similar departures could create tailwinds for Datadog, Inc. (NASDAQ:DDOG). The bears combine these worries with the firm's high forward P/E ratio of 107 to remark that the firm could suffer more than most.
Shifting towards the hedge funds, 75 out of the 1,041 hedge funds part of Insider Monkey's Q4 2025 database had held Datadog, Inc. (NASDAQ:DDOG)'s shares. This figure jumped to 80 out of 1,022 funds in Q1 2026. In terms of movement, the hedge fund stakes are quite interesting. In Q1, the biggest stakeholder was Citadel Investment Group, whose $319 million stake marked a 200% jump. Others, such as Millennium Management and Balyasny ***** et Management grew their stakes by 740% and 1,663%. Short interest as a percentage of float was 4% as of July end.

#datadog #NASDAQ #bears #revenue

Sands Capital, an investment management company, released its "Sands Capital Technology Innovators Fund" Q2 2026 investor letter. A copy of the letter can be downloaded here. In the quarter, global equities rebounded sharply, with the MSCI ACWI posting its strongest quarterly gain since 2020, supported by broad market strength, easing geopolitical tensions, and continued enthusiasm for AI infrastructure. Information technology led the advance, with semiconductor and hardware companies accounting for most of the index's rise. The fund returned 26.9% (net) in the second quarter of 2026. The portfolio benefited from strong gains across memory, software infrastructure, cybersecurity, and other AI-related holdings, although its concentrated exposure to mega-cap chip designers and manufacturers weighed on relative performance as leadership broadened into CPUs, networking, and memory. Vertical software, internet, and financial holdings were modest detractors amid macro concerns and uncertainty over AI disruption. The fund remains focused on critical AI bottlenecks, including compute, memory, manufacturing, networking, and power, while retaining selected businesses that may use AI to strengthen their competitive positions. You can check the fund's top five holdings to learn more about its leading investment ideas for the year.
In its second-quarter 2026 investor letter, Sands Capital Technology Innovators Fund highlighted Datadog, Inc. (NASDAQ:DDOG). Datadog, Inc. (NASDAQ:DDOG) operates an observability and security platform for cloud applications in the United States and internationally. On August 7, 2026, Datadog, Inc. (NASDAQ:DDOG) closed at $233.93 per share. One-month return of Datadog, Inc. (NASDAQ:DDOG) was -4.29% and its shares gained 93.33% over the past 52 weeks. Datadog, Inc. (NASDAQ:DDOG) has a market capitalization of $89.44 billion.
Sands Capital Technology Innovators Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q2 2026 investor letter:
"Datadog, Inc. (NASDAQ:DDOG) is a cloud-native observability and security software company that helps organizations monitor infrastructure, applications, logs, and cybersecurity across increasingly complex technology environments. Our latest engagement with the company focused on its proposal to reincorporate from Delaware to Nevada and the potential implications for shareholder rights, board oversight, and long-term governance. Reincorporation proposals can have meaningful implications for the legal framework governing a company's directors, officers, and shareholders. Because corporate law varies by state, a change in domicile may affect litigation standards, fiduciary duties, shareholder rights, and the balance between management protections and investor oversight. We expect more companies to submit proposals to reincorporate. As long-term shareholders, we generally engage with companies considering these proposals to better understand their rationale, evaluate whether shareho

Datadog Inc. (DDOG) spent last summer defending itself against one accusation: that its biggest customer was quietly building its way out the door.
In July 2025, Guggenheim downgraded the stock to sell, warning that OpenAI was developing in-house monitoring tools that could carve a $150 million hole in Datadog's revenue. The stock brushed it off and nearly doubled over the following year.
On August 6, the warning arrived anyway, delivered not by a bearish **** yst but by Datadog's own management.
The company beat second-quarter revenue and earnings estimates and raised its full-year guidance for a third straight quarter. Investors sold the stock down as much as 19% the same day, according to The Motley Fool.
Related: Datadog's largest customer renews deal but cuts usage

#warning #july #guggenheim

What happened: Software stocks declined on Thursday as shares of Datadog (DDOG), Figma (FIG), and HubSpot (HUBS) plummeted more than 15% following their quarterly results.
Shares of software peers Salesforce (CRM) and ServiceNow (NOW ) also dropped, along with Workday (WDY) and Cloudflare (NET).
What's behind the move: The software sector has been attempting a rebound since April lows as investors worry that AI will disrupt industry business models. They are therefore viewing earnings with high scrutiny. Datadog's quarterly results beat on the top and bottom line, but the company's adjusted gross margin of 80% came in slightly below the ***** ysts' consensus estimate of 80.7%.
Meanwhile, Figma's quarterly results also beat on the top and bottom lines, but the software design and collaboration company flagged rising AI inference spending, or the ongoing cost of running user prompts through AI models.
"We do not charge our customers for their usage of products that are currently in beta, and we bear the cost of inference without offsetting consumption revenue," Figma CFO Praveer Melwani said during the company's earnings call. "As a result, gross margin will vary from quarter-to-quarter in the near term."

#quarterly #figma #shares #gross

Earnings continue to roll in, driving the stock market to new highs.
The latest reports from Datadog (DDOG), AMD (AMD), Sandisk (SNDK), and Western Digital (WDC) suggest some profit-taking on Wall Street, as robust earnings and raised guidance haven't been enough to stanch post-earnings sell-offs after those stocks made huge gains so far this year.
On Thursday, ConocoPhillips (COP), Constellation Energy (CEG), Airbnb (ABNB), DraftKings (DKNG), and Celsius Holdings (CELH) also report.
Overall, it's shaping up to be a strong earnings season for the S&P 500 (^GSPC). According to FactSet data, ******* ysts estimate the year-over-year S&P 500 earnings growth rate for the second quarter will be 47.5% — surging past the five-year average of 16.4% and the 10-year average of 10.3%.
If that holds, it will mark the second consecutive quarter of earnings growth above 20% for the index and the seventh straight quarter of double-digit growth.

#second

With a market cap of $90.7 billion, Datadog, Inc. (DDOG) is a leading observability and security platform that provides unified visibility across applications, infrastructure, data, AI models, and security to help businesses manage complex technology environments at scale. Powered by AI, it enables organizations to proactively detect and resolve issues, empowering global enterprises and fast-growing AI companies to innovate with confidence.
The New York-based company is slated to announce its fiscal Q2 2026 results before the market opens on Thursday, Aug. 6. Ahead of this event, ***** ysts expect DDOG to report a profit of $0.13 per share, a 116.7% jump from $0.06 per share in the year-ago quarter. It has exceeded Wall Street's earnings expectations in each of the past four quarters.
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#market #security #Share #thursday

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its "RiverPark Large Growth Fund" Q1 2026 investor letter. A copy of the letter can be downloaded here. The US stock market declined in the quarter with the S&P 500 index ("S&P") and the Russell 1000 Growth index ("RLG") falling 4.33% and 9.78%, respectively. Markets started the year positively but became volatile mainly due to increased tensions with Iran. The Federal Reserve kept rates unchanged in January and February. Still, rising energy prices and weaker economic data sparked concerns about stagflation, leading investors to rethink the timing and scale of future rate cuts. Investor sentiment shifted from growth and tech stocks amid inflation, interest rate, and supply chain concerns. Opposing AI-driven rotations heavily influenced investor sentiment, affecting growth stocks—enthusiasm grew for semiconductor firms linked to AI infrastructure spending, while enterprise software companies, viewed as vulnerable to AI disruption, faced pessimism. The Fund's software holdings were sold off heavily, while the underweight in semiconductor companies, which benefited most from AI infrastructure spending, affected the performance. Despite challenges, the firm remains confident in the long-term prospects and valuations of its portfolio companies. Please review the Fund's top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, RiverPark Large Growth Fund highlighted Datadog, Inc. (NASDAQ:DDOG). Datadog, Inc. (NASDAQ:DDOG) is a leading cloud computing and software company that provides an observability and security platform for cloud applications. On July 7, 2026, Datadog, Inc. (NASDAQ:DDOG) closed at $256.81 per share, reflecting a market capitalization of $91.41 billion. Datadog, Inc. (NASDAQ:DDOG) posted a one-month return of 12.82%, while its shares gained 79.90% over the past 52 weeks.
RiverPark Large Growth Fund stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q1 2026 investor letter:
"Furthermore, for the software companies we own, the evidence suggests AI is driving new business rather than destroying existing revenue. Datadog, Inc. (NASDAQ:DDOG), which monitors the AI infrastructure being built by hyperscalers and enterprises alike, reported 32% revenue growth, accelerating from 29% last quarter, with new logo bookings setting an all-time record. The AI gold rush is not disintermediating Datadog; it is providing its fastest-growing source of new customers."

Is DDOG a good stock to buy? We came across a bullish thesis on Datadog, Inc. on Elliot's Musings's Substack by Elliot. In this article, we will summarize the bulls' thesis on DDOG. Datadog, Inc.'s share was trading at $260.36 as of July 2nd. DDOG's trailing and forward P/E were 678.15 and 108.70 respectively according to Yahoo Finance.
nullplus/Shutterstock.com
Datadog, Inc. operates an observability and security platform for cloud applications in the United States and internationally. Datadog, Inc. DDOG delivered its strongest quarter in years during Q1 2026, marking a potential inflection point in both its AI and core observability businesses. Revenue surpassed $1 billion for the first time, growing 32% year-over-year, while management raised full-year revenue guidance by approximately $240 million, largely reversing the conservative outlook that weighed on the stock after Q4 2025.
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Palantir (PLTR) stock jumped more than 2% on Thursday after D.A. Davidson ****** yst Gil Luria upgraded it to a Buy rating from Neutral and raised his price target on the stock to $175.
Shares extended gains from the previous session, when it jumped 7% after the company unveiled a new AI partnership with Nvidia (NVDA) focused on government and other security-sensitive customers.
"Palantir has grown into its valuation as profits have soared, and the multiple has come in, providing investors with a gift just in time for the United States of America's 250th birthday," Luria wrote on Thursday morning.
"We believe Palantir's valuation is the most attractive it has been in a while, especially in relation to other high-growth software companies," he added.
Luria noted that while Palantir now trades in line with other AI-focused software companies such as Snowflake (SNOW), Shopify (SHOP), Datadog (DDOG), and CrowdStrike (CRWD), "it is growing twice as fast as any of them."

Elon Musk crossed a milestone few thought possible earlier this month when ****** eX (SPCX) completed its long-awaited initial public offering (IPO), helping push his net worth past the $1 trillion mark.
The achievement sparked familiar criticism about billionaire wealth. Mark Cuban responded with a different argument: Musk's fortune exists because millions of Americans decided they wanted a piece of the stock market.
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From 'Hold' to 'Buy': Here Is Why Truist Just Changed Its Mind on DDOG Stock

The financial industry routinely uses the headline S&P 500 Index ($SPX), as tracked by the SPDR S&P 500 (SPY), to paint a picture of enduring market health. The mainstream narrative suggests that as long as the main averages hold near high ground, the broader equity market is functioning perfectly. I think that's faulty logic.
I pulled up this chart of 20 of the biggest stocks in the U.S. market. I've excluded rookie ******* eX (SPCX), since the goal here is to see how much performance breadth there is among these established public companies.
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From 'Hold' to 'Buy': Here Is Why Truist Just Changed Its Mind on DDOG Stock

Not long ago, fears that artificial intelligence (AI) agents could turn the Software-as-a-Service (SaaS) business model on its head sent investors scrambling for the nearest exit. The selloff swept through the sector like a storm and Datadogb (DDOG) got caught in the crossfire despite posting strong results and maintaining a healthy growth outlook.
The irony could not be richer. While many viewed AI as a threat, **** ysts increasingly saw Datadog as one of the companies best positioned to cash in on the trend. After all, every new AI application, model, and deployment creates another layer of complexity that businesses need to monitor. That reality plays directly into Datadog's wheelhouse.
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Datadog, Inc. (NASDAQ:DDOG) has been among the top performers in May 2026 with impressive gains of more than 97%. Most of these gains came in after the company posted strong results for fiscal Q1 2026, on May 7. Datadog, Inc. (NASDAQ:DDOG) is also among our Best Performing Stocks in May.
During the quarter, the company posted $1.01 billion in revenue, ahead of the consensus of $959.95 million. The EPS of $0.6 also came in ahead of the expectations of $0.51. CEO Olivier Pomel noted the 32% year-over-year revenue growth and more than $1 billion in revenue to be a significant milestone, driven by strong execution across customers of all sizes and industries adopting cloud-based, AI-enabled solutions. Management noted that customer growth remained healthy as the company had around 4,500 customers spending $100,000 or more annually, reflecting a 21% growth from a year ago.
Recently, on May 29, RBC Capital raised the price target on the stock from $219 to $250 and maintained a Buy rating on the shares. The firm met with Datadog’s management and came back reassured about the firm’s bullish thesis. The firm sees the company benefiting from three key tailwinds, including ongoing cloud migration, rising AI adoption, and new product innovation.
Datadog, Inc. (NASDAQ:DDOG) is a SaaS-based observability and security platform that provides cloud monitoring, ***** ytics, and cybersecurity solutions for applications and infrastructure.
While we acknowledge the potential of DDOG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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