GoKawiilDatadog surged 31% on Thursday after reporting blockbuster earnings and lifting its guidance for the year, showing how some software names are starting to prove their case as winners in artificial intelligence.
Quarterly revenue topped one billion dollars for the first time.
The pop fueled rallies in shares of Snowflake and MongoDB , which each climbed 10%.
Datadog provides the cloud infrastructure that AI models from OpenAI and Anthropic run on. According to analysts, OpenAI is its biggest customer.
CEO Olivier Pomel revealed on the earnings call that the company landed two major hyperscaler customers for training in their superintelligence labs.
"This was an eye-popping print," wrote Andrew Sherman, analyst at TD Securities, who called it a "must-own stock."
The positivity surrounding Datadog follows strong earnings from Twilio last week.
Investors say the performance from Datadog and Twilio underscores how companies that can deploy AI-native solutions while also articulating their path to monetization can ease disruption fears, for now.
At Twilio's investor day on Wednesday, the communications software company unveiled new platform capabilities that help AI agents communicate and work together more effectively. The updates include logging customer data, facilitating handoffs, and creating lists of actionable data.
It may sound mundane, but Twilio CEO Khozema Shipchandler told CNBC that these enhancements will dramatically improve the customer experience by making agents better at solving customer issues.