Datadog Stock Drops 18% Despite Q2 Beat and Raised Guidance

Datadog shares plunged nearly 18% on Thursday despite beating Q2 estimates and raising full-year guidance, as investors focused on slowing sequential revenue growth and cashed in recent gains. The software maker reported adjusted EPS of 65 cents and revenue of $1.12B, both above consensus, and lifted its annual outlook. However, Q3 guidance, though above Wall Street forecasts, implied roughly 29% growth, a deceleration after a steep first half. The stock had risen over 110% in 2026. AI-related demand remains strong, with large customers growing to 4,720 from 3,850 a year earlier.