data dog Shares soared 31% on Thursday after reporting blockbuster earnings and raising their outlook for the year, showing that some software names are starting to prove their case as winners in the artificial intelligence space.
Quarterly sales exceeded $1 billion for the first time.
Pop music accelerated stock price rise snowflake and Mongo DBeach rose 10%.
Datadog provides the cloud infrastructure on which OpenAI and Anthropic’s AI models run. According to analysts, OpenAI is the company’s largest customer.
CEO Olivier Pommer said in an earnings call that the company has acquired two major hyperscaler customers for training at its Superintelligence Institute.
“This was an eye-opener,” wrote TD Securities analyst Andrew Sherman, calling the stock “a stock to own.”
The positive atmosphere surrounding Datadog is Twilio last week.
Investors say Datadog and Twilio’s track record highlights how companies that can deploy AI-native solutions with a clear path to profitability can alleviate concerns of disruption at this time.
At Twilio’s investor day on Wednesday, the communications software company announced new platform features that will help AI agents communicate and collaborate more effectively. Updates include logging customer data, facilitating handoffs, creating lists of actionable data, and more.
It may sound trite, but Twilio CEO Kosema Shipchandler told CNBC that these enhancements will dramatically improve the customer experience by improving agents’ ability to resolve customer issues.
Experts say allowing agents to log memory will make customer service calls less stressful for end users.
This technology is useful in scenarios where an individual calls an airline, speaks with an agent while troubleshooting an issue, and then the call hangs up. Customers ultimately save time and money by allowing agents to save information and continue the conversation when callers are disconnected.
“We’re not just lowering costs and serving more consumers, we’re actually increasing our revenue footprint,” Shipchandler said.
Despite ongoing stress in the software industry, Twilio has managed to win investor confidence, with its stock up nearly 50% over the past month, outperforming all constituents of the IGV Software ETF.
The rise in Twilio’s stock price follows strong quarterly results, with the company posting its highest revenue growth in more than three years. Voice revenue increased 20% year-over-year in the first quarter.
“[Twilio]differentiates itself by the breadth of its communication channels and the amount of customer data it has,” RBC Capital analyst Rishi Jallia said in a note to investors after the company’s investor day.
Shipchandler told CNBC that new products are coming in both governance and observability.
