Datadog Beats Quarterly Estimates on AI-Driven Demand, Shares Jump

Cloud monitoring and security firm Datadog reported better-than-expected fourth-quarter results on Tuesday, driven by growing demand linked to the expansion of artificial intelligence technologies. The company’s shares rose more than 14 percent following the announcement.

The increasing adoption of generative AI has led to higher data volumes and greater complexity in corporate information technology systems, boosting demand for application and infrastructure monitoring tools offered by companies such as Datadog.

“During 2025, we delivered over 400 new features and capabilities to help our customers as they migrate to the cloud and begin deploying next-generation AI applications into production,” Chief Executive Officer Olivier Pomel said.

Headquartered in New York City, Datadog provides a cloud-based monitoring and analytics platform that enables organisations to track the performance of their software applications, servers and infrastructure from a single interface.

The company said nearly half of its customers now use four or more of its products, highlighting broader adoption of its platform and increased spending by existing clients.

Datadog’s share price rose sharply following the earnings report, partially recovering from last week’s wider selloff in software stocks, which was driven by uncertainty surrounding artificial intelligence investments and market expectations.