Sometimes a rising tide lifts all boats, and in the AI data cloud world, Snowflake's earnings are a very high tide. That's the story behind Datadog's after-hours pop on Wednesday.
Snowflake reported a double beat for its second quarter, with revenue hitting $1.55 billion against estimates of $1.48 billion, and adjusted earnings per share of 62 cents versus the 45 cents analysts expected. The company is riding the enterprise AI wave, with product revenue up 37% year-over-year and remaining performance obligations reaching $9 billion, a 30% jump from last year.
CEO Sridhar Ramaswamy summed it up: "AI continues to compound our advantages, creating a flywheel effect across the business."
That flywheel sent Snowflake stock soaring more than 22% after the report, and it pulled Datadog along for the ride. Why the connection? Datadog offers an AI-powered observability and security platform, and it often moves in sympathy with Snowflake. Investors see them as kindred spirits in the AI infrastructure boom.
Datadog isn't just riding on someone else's coattails, though. The company reported its own second-quarter results last month, beating top and bottom line estimates as AI drove strong demand. It also raised its full-year guidance, citing continued AI momentum.
So when Snowflake's numbers validated the AI narrative, Datadog investors had reason to cheer. In extended trading Wednesday, Datadog stock was up 4.80%, trading at $219.27 at the time of publication.
The takeaway? In the AI economy, good news for one cloud data player can be good news for the whole ecosystem. And for Datadog, Snowflake's strong quarter is a signal that the AI-driven demand isn't slowing down anytime soon.
