New York, Feb 24, 2026, 09:34 ET — Regular session
Datadog, Inc (DDOG.O) slipped roughly 1.3% to $101.24 early Tuesday, trading in a range from $98.08 up to $101.50. The Nasdaq index also lost about 0.3%. (Google)
Why does this shift stand out? Investors now see AI as more than just something that spits out code or answers queries. These tools can catch bugs, flag risks, and—on some level—edge into the turf of software and cybersecurity vendors.
The market has a way of turning a simple product demo into a full-blown valuation event. In software, this sometimes leads to a rough ride—bruising, even—despite nothing actually changing within the company itself.
Shares of Datadog and several cybersecurity peers tumbled Monday after Anthropic, an AI startup, launched its Claude Code Security tool. The software targets open-source repositories, scanning for serious vulnerabilities and suggesting patches to clean up bugs in public code. “What you’re seeing today is really the continuation of a panic-driven, narrative-led selloff,” said Shrenik Kothari, security and infrastructure analyst at Robert W. Baird. Kothari maintained the new tool still can’t substitute for real-time threat detection and response. (Reuters)
Worries have gone beyond just cybersecurity. IBM shares slid 13.2% on Monday after Anthropic touted its Claude Code tool’s ability to modernize COBOL—a programming language that’s still central to many IBM mainframes. The AI startup, in a blog post, claimed some projects could wrap up “in quarters instead of years.” (Reuters)
Datadog provides cloud monitoring and analytics software, more commonly known as observability tools, which let companies track application and server performance and resolve issues more quickly. The company also offers cloud security products, landing it in discussions alongside cybersecurity platforms whenever investors start grouping the sector more broadly.
Datadog topped analyst forecasts for the fourth quarter earlier this month, with revenue up 29% to $953.2 million, LSEG data reported by Reuters shows. CEO Olivier Pomel pointed to “over 400 new features” introduced in 2025. The company’s guidance for first-quarter revenue landed between $951 million and $961 million. (Reuters)
When shares tumble, investors often scan filings for clues. This time, a Form 144 revealed Alexis T. LeQuoc intends to offload 21,612 Class A shares. The filing—linked to Rule 144 regarding restricted stock—notes these are 10b5-1 plan transactions, meaning they’re scheduled in advance by insiders. (stocktitan.net)
For Datadog, along with its peers, there’s a real risk here: “AI disruption” could move from buzzword to budget reality. When major clients figure AI subscription bundles with built-in code security scanners are sufficient, pricing leverage and renewal rates may flip fast. The market isn’t likely to stop probing that scenario anytime soon.
Doubts linger about the market’s smooth trajectory. Forrester analysts described drops in cybersecurity stocks as “sentiment contagion,” cautioning that a rebound could drag on for “quarters, not days.” (Forrester)
Eyes are on Anthropic this Tuesday morning, with the company set to broadcast a virtual event, “The Briefing: Enterprise Agents,” from 9:30 to 10:30 a.m. EST. The agenda? Product news and live demos—potentially enough to steady the market’s pulse, or send it racing again. (anthropic.com)
