Datadog is a cloud monitoring and observability software vendor whose platform collects, stores, and analyzes telemetry from applications and infrastructure; that telemetry is a growing input for AI models and for operations teams building AI-driven features and monitoring.
The top-line trend has improved materially: quarterly revenue rose from $547.5 million in CY2023Q3 to $1,121.5 million in CY2026Q2, with year-over-year growth rates moving from the mid-20s in 2023–2024 into the 32.2% and 35.6% ranges in CY2026Q1 and CY2026Q2 respectively, and revenue acceleration flagged true. GAAP diluted EPS has been volatile but is also accelerating, falling to $0.01 in CY2025Q2 before recovering to $0.15 in CY2026Q1 and $0.12 in CY2026Q2.
The combination of accelerating revenue and earnings, a market cap around $90.1 billion, and deep institutional sponsorship supports Datadog's position within the AI Data theme. Technical measures show a confirmed uptrend and strong relative performance versus the S&P 500 over 12 months, consistent with a Stage 2 continuation profile, making Datadog a timely leader for investors watching AI-data exposure.
Why now
Acceleration in both revenue and GAAP EPS through the first half of 2026 provides a fresh fundamental reason to watch Datadog: revenue grew to $1.006 billion in CY2026Q1 and $1.121 billion in CY2026Q2 with YoY increases of 32.2% and 35.6%, and GAAP EPS has rebounded from mid-2025 lows; at the same time institutional ownership is very high and the stock sits in an established uptrend, so momentum and sponsorship align with thematic demand for AI-ready data platforms.
The setup
Last close was $242.93 (as of 2026-08-27), just under the 50-day average ($249.24) and well above the 200-day average ($175.39). Short-term EMAs are close to the price (EMA9 $236.04, EMA21 $242.74), with the share price about 2.9% above the 9-day EMA and 0.08% above the 21-day EMA; RSI is neutral at 49.5. The technical picture registers as a confirmed uptrend, Weinsten Stage 2, but the stock has no verified fresh breakout or 9/21-day EMA add setup and is flagged as a watch rather than an actionable entry (81 sessions since the last setup).
Revenue trajectory
Quarterly revenue with year-over-year growth. Solid bars are actuals from SEC EDGAR filings (XBRL); dashed bars are analyst consensus via Yahoo Finance (43 analysts).Earnings trajectory
Solid bars are quarterly GAAP diluted EPS from SEC EDGAR filings. Dashed bars are analyst consensus, which is typically adjusted (non-GAAP). The two are measured differently, so a step between the last actual and the first estimate usually reflects that change in basis rather than a change in the business.Analyst full-year EPS consensus (typically adjusted): FY'26E $2.53 (+23%) · FY'27E $2.97 (+17%) — 43 analysts
Risks
1) Growth could reaccelerate down: the company’s quarterly growth rates were in the mid-20% range before the 2026 step-up, and any slowdown in AI-related spending or customer adoption would pressure the multiple. 2) GAAP EPS has been volatile, swinging from $0.01 in CY2025Q2 to $0.15 in CY2026Q1, so margins and near-term earnings remain sensitive to sales mix and investment levels. 3) High institutional ownership (about 92.8% reported) concentrates supply and could amplify downside in a broad tech sell-off or if large holders reduce positions.
Framework fit
CANSLIM
4/7- CCurrent quarterly GAAP EPS growth ≥ 25%+1100%✓
- AAnnual GAAP EPS growth ≥ 25%insufficient data—
- NNew highs — within 15% of 52-week high-15.69%✕
- SSupply/demand — up-day volume leads0.99x✕
- LLeader — outperforming the S&P 500+97% 6m✓
- IInstitutional sponsorshipmodel score 10/10✓
- MMarket in a confirmed uptrendConfirmed uptrend✓
Minervini Trend Template
7/7Stage 2 confirmation checklist: price versus rising long-term moving averages and the 52-week range.
Weinstein Stage
Established uptrend: price is above a rising 30-week proxy, with the 200-day line used as a separate confirmation.