What Happened?
Shares of cloud monitoring platform Datadog (NASDAQ: DDOG) jumped 3.5% in the afternoon session after it caught a slipstream, having already surged 31% on its own May 7 earnings, as Snowflake's impressive results confirmed the thesis established in recent weeks.
Snowflake's acceleration validates the exact AI consumption flywheel that sent Datadog's stock soaring on May 7: more AI workloads running in cloud infrastructure means more pipelines, logs, metrics, and traces to monitor, which is precisely what Datadog sells.
The more AI workloads that enterprises deploy, whether on Snowflake, AWS, or anywhere else, the larger the observable cloud surface Datadog gets paid to watch. SNOW's $6 billion AWS commitment and its 13,600 AI accounts generating accelerating consumption are not just good news for Snowflake; they describe a cloud environment that is structurally getting larger and more complex. Complexity is Datadog's moat.
After the initial pop, the shares cooled down to $228.29, up 2.9% from the previous close.
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What Is The Market Telling Us
Datadog’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 29.3% on the news that the company reported strong first-quarter 2026 financial results that surpassed analyst expectations and raised its full-year revenue and profit guidance.
The cloud monitoring company posted first-quarter revenue of $1.01 billion, a 32.2% increase year-over-year, which beat estimates of $959.6 million. Adjusted earnings per share came in at $0.60, also topping the consensus forecast of $0.51. Looking ahead, Datadog significantly lifted its outlook for the full year.
The company now expects revenue of $4.32 billion at the midpoint, up from a prior forecast of $4.08 billion. The adjusted earnings forecast was also increased to $2.40 per share at the midpoint. The company's growth was further highlighted by an increase in its largest customers, with those paying over $100,000 annually growing to 4,550.
Datadog is up 70.7% since the beginning of the year, and at $228.29 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Datadog’s shares 5 years ago would now be looking at an investment worth $2,507.
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