New York, Feb 10, 2026, 13:31 ET — Regular session
Datadog surged roughly 15% Tuesday, one of its biggest intraday jumps in recent months, after beating Wall Street’s expectations. Shares were last trading up 14.8% at $130.86.
Investors are sifting through a volatile software space, shaken by concerns that emerging AI products might disrupt established players. The Dow advanced roughly 0.5%. The S&P 500 barely budged, and software stocks led, with the S&P 500 software index climbing 1.3%.
Beyond tech, investors picked through new economic numbers suggesting consumers pulled back a bit. December’s U.S. retail sales held steady, pushing Treasury yields lower as markets priced in higher chances for a Fed rate cut this year. Attention now shifts to a U.S. unemployment readout coming Wednesday, with an inflation update set for Friday.
AI disruption worries haven’t eased up. Following Anthropic’s roll-out of plug-ins for its Claude Cowork agent, the S&P 500 software and services index tumbled as much as 17% over six straight sessions, then clawed back roughly 7%, Reuters reported. “The market is pricing in worst-case AI disruption scenarios that are unlikely to materialize over the next three to six months,” JPMorgan’s Dubravko Lakos-Bujas and his team said. Morgan Stanley’s Katy Huberty pointed to sentiment, not fundamentals, as the main driver of the valuation gap in U.S. software. Reuters
Datadog bulls finally got some real ammo. Fourth-quarter revenue hit $953.2 million, up 29% on the year, and adjusted earnings landed at 59 cents a share—both coming in ahead of forecasts, per Reuters. The company pitches its “observability” software as a must-have for tracking applications and server performance, and lately it’s been making the case that its platform matters even more as generative AI ramps up data and network complexity. “During 2025, we delivered over 400 new features and capabilities,” CEO Olivier Pomel said. Reuters
Datadog’s guidance landed in a gray zone. For the first quarter, the company expects revenue between $951 million and $961 million, and it set its full-year top-line forecast at $4.06 billion to $4.10 billion. The non-GAAP earnings target: $2.08 to $2.16 per share—those figures exclude costs including stock-based comp. Datadog wrapped up 2025 with $4.47 billion in cash and marketable securities on the books, plus $291 million in free cash flow for the quarter. Customer count at year-end: 603 with ARR of at least $1 million, meaning recurring subscription contracts. CEO Olivier Pomel said Datadog is “excited about our plans to deliver more AI-powered innovation” in 2026. GlobeNewswire
Still, the rally doesn’t erase the uncertainty dogging high-growth software names. Datadog has been staring down stiffer competition lately—from Dynatrace, Cisco’s Splunk, and data platform player Snowflake. Earlier this year, shares slid roughly 16% before clawing back gains on Tuesday, according to Investors.com. Whether the rebound sticks is another story, especially if companies tighten up IT budgets again or AI-driven shakeups spook the sector.
The next big event lands soon. Datadog is holding its investor day in New York on Feb. 12 at 1:00 p.m. EST, the company’s investor relations site shows.
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