Datadog shares jumped 23% on Thursday after the software company reported third-quarter revenue that topped Wall Street estimates and issued a strong forecast for the fourth quarter.
The stock had its second-best day ever, behind only November 2023, when shares rose 28%.
The company reported revenue of $885.7 million, which was up 28% year over year, and topped the $852.8 million expected by LSEG analysts.
The cloud software company expects fourth quarter revenue to reach between $912 million and $916 million, far surpassing Wall Street's projections of $887 million.
As artificial intelligence-driven demand for cloud-security products has continued to increase, Datadog has been rolling out multiple AI technologies and security tools over the past year.
"The Datadog R&D team is innovating rapidly to help our customers solve problems in the AI space," CEO Olivier Pomel said in a release.