- CNBC’s Jim Cramer examined Tuesday’s rally in enterprise software company Datadog and said it could spell success for other technology stocks.
- Datadog develops enterprise cloud monitoring and security products using generative artificial intelligence.
CNBC’s Jim Cramer examined enterprise software company Datadog’s rally on Tuesday and said tech stocks’ gains aren’t over yet and the company’s success signals good news for comparable stocks.
“You had to be curious and investigate what Datadog had to say. “You couldn’t be dogmatic and caught up in negativity,” Cramer said. “You had to believe in bowling, in the pin action that could come from hitting the front pin of the tech phalanx.”
Datadog shares rose nearly 30% after Tuesday’s quarterly report beat Wall Street’s earnings estimates and the company raised its full-year forecast, boosting rivals like MongoDB and Snowflake. Cramer said the stock’s success also boosted well-known partners like Meta, Shopify and ServiceNow, as well as tangential technology stocks.
Datadog develops enterprise cloud monitoring and security products using generative artificial intelligence. Cramer said companies may realize they can’t afford to forego spending on artificial intelligence and cybersecurity.
Cloud software companies like Datadog have seen revenue decline this year as many customers took cost-cutting measures. But the company’s CEO suggested Tuesday that its customers’ optimization efforts may be slowing. Cramer said this change in Datadog customers’ habits could mean fewer problems for other technology and enterprise software companies.
According to Cramer, today’s tech rally suggests that last week’s market gains will not be short-lived.
“I think last week was a turning point for the stock market – I’ve said that every day – and if you haven’t changed your mind to adapt to the new reality, I think there’s a chance you will “Be left behind,” he said. “Oh, there will be declines – tomorrow, I don’t know – but those declines will increasingly stimulate more buying than selling as we get closer to the end of the year.”
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Meta.