AI Application Software Stocks Soar

Cloud monitoring giant Datadog published strong financial results on Thursday, driving a surge in the U.S. AI application software sector, with Datadog's stock price soaring by more than 38% at one point and closing up over 30%. It became one of the most eye-catching market performances of the day in the U.S. stock market.

Financial report triggers chain reaction

The financial report released by Datadog for the first quarter of 2026 showed that the revenue for the quarter reached $1.07 billion, and the adjusted earnings per share were 51 cents, both exceeding analysts' expectations. It was also the first time in the company's history that the quarterly revenue broke through the $1 billion mark.

The company's management revealed during the earnings call that the ARR (Annual Recurring Revenue) growth accelerated month by month in the first quarter, with the CEO stating, "We have seen these healthy growth trends continue into April," emphasizing that the acceleration in revenue growth was evident across both AI and non-AI customer bases, indicating that, besides AI-related demands, the underlying basic demand was also stronger.

More crucially, the forward guidance: Datadog significantly raised its revenue forecast for the 2026 fiscal year to between $4.3 billion to $4.34 billion, a notable increase from the previous range. CNBC reported that Datadog provides cloud infrastructure support for AI models developed by OpenAI and Anthropic, and OpenAI is already one of its top customers.

The market's focus then shifted to a few key narratives: the accelerated revenue contribution from AI-native customers, the commercial momentum of LLM Observability (Large Language Model Observability), Cloud SIEM, and CNAPP products, and whether broader enterprise-level AI deployments have started to drive incremental consumption. At the same time, investors are also assessing the conservatism of the guidance—if AI workloads continue to grow in the second half of the year, there is further potential for upward movement.

Datadog provides cloud infrastructure support for AI models developed by OpenAI and Anthropic, and OpenAI is already one of its top customers.

Peer stocks resonate and rise

The optimism sparked by the report quickly spread throughout the entire cloud data and observability sector. Snowflake rose by more than 10%, MongoDB rose by more than 10%, Elastic rose by more than 6%, Figma rose by more than 4%, Unity rose by nearly 9%, and Fortinet rose by more than 20%.

This联动 logic is clear: Datadog, Snowflake, MongoDB, and Elastic are all consumer-facing cloud infrastructure software, sharing the core narrative of "accelerating enterprise AI spending."

Datadog's better-than-expected performance indicates that large tech customers' actual investment in AI inference and monitoring layers is accelerating, rather than remaining at the conceptual stage, thereby alleviating the market's doubts about the monetization capabilities of the entire sector.

This collective outbreak of software stocks indicates that the AI trend is accelerating from the upstream computing layer to the application layer. As the "meter" of AI infrastructure—monitoring and bridging computing power and applications—Datadog's breakthrough performance means that the commercial scale of AI workloads has entered a new order, also providing important fundamental support for the enterprise software sector, which has been under valuation pressure for a long time.