Jim Cramer Explains Datadog, Inc. (NASDAQ:DDOG)’s Share Price Movement

Datadog, Inc. (NASDAQ: DDOG) is a cloud infrastructure and application monitoring platform. Its shares have surged by 102% over the past year and 88% year-to-date. On August 6th, the stock experienced a sharp drop of 19% following the company's second quarter earnings report. Jim Cramer discussed the stock on that day, referring to it as a momentum play and noting that people believe Datadog never misses. However, the company's stock is considered momentum stock due to its perceived invincibility.

The company's earnings were mixed, leading to differing opinions among investors. Analysts pointed out that the firm was benefiting from AI catalysts, while bears argued that the full-year revenue outlook fell short of estimates. Datadog's guidance increased the full-year revenue per share outlook to $4.45 - $4.47 and earnings per share to $2.50 - $2.54. Despite this, the company's full-year revenue guidance of $4.45 billion to $4.47 billion was below the estimated $4.69 billion, which led to a bearish outlook.

Hedge funds showed a moderate interest in Datadog's shares, with 75 of the 1,041 funds in Insider Monkey's Q4 2025 database holding the stock, increasing to 80 of 1,022 funds in Q1 2026. Citadel Investment Group increased its stake by 200%, while Millennium Management and Balyasny Asset Management grew their positions by 740% and 1,663%, respectively. The short interest was 4% as of July end.