Shares of software firms rise after Datadog reports stronger-than-expected quarterly results, boosting sector sentiment.
Software stocks climbed following Datadog’s latest earnings report, which exceeded analyst expectations. The company’s revenue grew 25% year-over-year to $653 million, driven by demand for cloud monitoring tools.
Prior to the release, consensus estimates had projected revenue of $640 million. The sector had underperformed in recent months amid concerns over slowing enterprise spending, making the beat a positive signal.
The Nasdaq Composite’s software sub-index rose 1.8% in early trading, with Datadog shares up 12% premarket.