What Happened?
Shares of cloud monitoring platform Datadog (NASDAQ: DDOG) jumped 2.9% in the afternoon session after the company announced expanded support and new integrations for Oracle Cloud Infrastructure (OCI), which aimed to improve the management of AI and machine learning workloads.
The new features included GPU Monitoring, Cloud Cost Management, and Cloud SIEM. These additions were designed to help customers improve reliability, secure modern applications, and better control their spending on Oracle's cloud platform. The announcement positioned Datadog as one of the first observability vendors to provide streamlined GPU monitoring for OCI, a key component for companies scaling their AI operations. This news followed other positive developments, including a contract renewal with OpenAI and several analysts raising their price targets on the stock, citing strong cloud consumption trends and positive usage growth in the company's services.
Contributing to the positive momentum, the major indices rebounded as signs of easing trade tensions between the U.S. and China emerged over the weekend.
The tech-focused Nasdaq Composite jumped around 1.7%, while the S&P 500 gained 1.2%. This rebound follows a significant sell-off the previous trading day, which saw the Nasdaq plummet 3.6% and the S&P 500 sink 2.7% after threats of new tariffs heightened fears of a trade war. Investor sentiment improved after the U.S. President adopted a more conciliatory tone toward Beijing in a social media post. The shift in language helped calm market jitters and spurred a broad-based rally as investors welcomed the potential de-escalation of the trade dispute.
The shares closed the day at $164.24, up 3.4% from previous close.
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What Is The Market Telling Us
Datadog’s shares are quite volatile and have had 18 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 3 days ago when the stock dropped 2.8% after President Trump threatened to increase import taxes on Chinese goods, reigniting trade war fears. The threat was in response to China's move to restrict its exports of rare earth minerals, which are critical to high-tech manufacturing in the U.S. The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-heavy Nasdaq Composite fell 2.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies.
Datadog is up 14.3% since the beginning of the year, and at $164.20 per share, it is trading close to its 52-week high of $168.65 from December 2024. Investors who bought $1,000 worth of Datadog’s shares 5 years ago would now be looking at an investment worth $1,405.
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