Datadog Shares Rise 31% After First $1 Billion Revenue Quarter

Datadog shares soared 31% on Thursday after the company reported quarterly revenue that topped $1 billion for the first time and lifted its guidance for the year. The move marked the company's biggest one-day pop since it went public in 2023. com reported that the results fueled shares of other cloud infrastructure names, with Snowflake and MongoDB each climbing 10%.

Datadog provides the cloud infrastructure that AI models from OpenAI and Anthropic run on. According to analysts, OpenAI is Datadog's biggest customer. Datadog CEO Olivier Pomel revealed on the earnings call that the company landed two major hyperscaler customers for training in their superintelligence labs.

Andrew Sherman, an analyst at TD Securities, called Datadog's results an eye-popping print and a must-own stock. " The positivity surrounding Datadog follows strong earnings from Twilio reported last week. Twilio shares are up about 50% in the past month.

The communications software company posted its highest revenue growth in more than three years, with voice revenue in the first quarter growing by 20% from the period a year ago. At Twilio's annual conference on Wednesday, the company unveiled new platform capabilities that help AI agents communicate and work together more effectively.

The updates include logging customer data, facilitating handoffs and creating lists of actionable data.

Twilio CEO Khozema Shipchandler told CNBC that these enhancements will dramatically improve the customer experience by making agents better at solving customer issues. Shipchandler added that new products are on the horizon in both governance and observability.

Rishi Jaluria, an analyst at RBC Capital, wrote that Twilio is differentiating on the breadth of its communication channels and the volume of customer data that sits within them. Investors say the performance from Datadog and Twilio underscores how companies that can deploy AI-native solutions while also articulating their path to monetization can ease disruption fears for now.

Datadog stock soars 31% as AI winners emerge in software.

The gains come despite continued stress in the software industry. Twilio has been able to win investor confidence, outperforming every constituent in the IGV Software ETF over the past month.