Datadog Stock Plummets 20% Despite Beating Earnings
Datadog's stock price plummeted by around 20% in premarket trading despite beating earnings and revenue estimates for Q2. The company reported adjusted EPS of $0.65, topping the consensus estimate of $0.58, and revenue of $1.12 billion, a 36% increase year-over-year.
The stock had surged 108% in 2026, making it one of the top performers in software this year. However, the strong results may have triggered profit-taking by investors, as Datadog's valuation was already elevated heading into the report.
Evercore analysts pushed back on the reaction, stating that 'the initial reaction seems a bit extreme' and that DDOG remains one of the best growth stories in software. The company's full-year guidance has been raised to $2.50-$2.54 EPS and $4.45-$4.47 billion revenue.