TLDR
- Datadog stock jumped 15% Tuesday, making it the top performer in the S&P 500 and Nasdaq 100 after beating Q4 earnings expectations
- The company reported adjusted earnings of 59 cents per share, beating analyst estimates of 55 cents, with revenue hitting $953 million versus expected $919 million
- Revenue grew 29% year-over-year as the company delivered over 400 new cloud and AI features during 2025
- First quarter guidance showed mixed signals with revenue forecast above expectations but adjusted earnings estimates below Wall Street’s forecast
- The stock had fallen 16% year-to-date before the earnings beat, caught up in the broader software and tech selloff
Datadog stock soared 15% Tuesday after the monitoring and analytics platform provider crushed fourth quarter earnings estimates. The company posted adjusted earnings of 59 cents per share, beating the 55-cent Wall Street consensus.
Revenue came in at $953 million for the quarter. That marked 29% growth from the same period last year. Analysts had expected $919 million.
The earnings beat made Datadog the top-performing stock in both the S&P 500 and Nasdaq 100 on Tuesday. The rally came at a crucial time for shareholders.
Datadog stock had dropped 16% to start 2026. The decline came during a broader selloff hitting software and technology stocks across the market.
Strong Product Development Drives Growth
CEO Olivier Pomel highlighted the company’s innovation efforts in a statement. Datadog delivered over 400 new features and capabilities during 2025.
These updates help customers migrate to the cloud and deploy next-generation AI tools into production. The company’s client list includes major players like Amazon Web Services and OpenAI.
The strong product rollout appears to be paying off. Revenue growth of 29% year-over-year shows demand remains healthy for Datadog’s monitoring platform.
Mixed Signals in Forward Guidance
The company’s outlook for the first quarter of 2026 sent mixed messages to investors. Datadog expects revenue between $951 million and $961 million for the coming quarter.
That range tops the $936 million analysts had forecast. But the adjusted earnings guidance disappointed Wall Street.
Datadog projects adjusted earnings of 50 cents per share at the midpoint. Analysts were looking for 53 cents.
Some analysts trimmed their price targets following the guidance release. Most maintained positive ratings on the stock despite the cautious outlook.
Full-year guidance calls for revenue between $4.06 billion and $4.10 billion. The company emphasized strong cash flow and execution alongside its growth targets.
Datadog plans to focus on AI capabilities and margin improvement throughout 2026. The company will provide more details at its investor day scheduled for Thursday.
The stock trades at a market cap of $39.17 billion. Average daily trading volume sits at 4.88 million shares.
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