Technology / Cloud
Cloud-native monitoring and analytics platform for developers and IT operations teams.
View forensic reportSnowflake, Datadog, and Cloudflare sit at the centre of the broadening software rally identified on 17 April. Each has a distinct setup, but the common thread is a free cash flow inflection that consensus has only partially recognised.
Free cash flow has compounded from $251 million in 2021 to $1.00 billion in 2025. The stock sits 57% below its 52-week high. Five data points explain the setup.
Revenue grew 30% to $3.43 billion with free cash flow exceeding $700 million. Four underappreciated growth vectors, from AI observability to security cross-sell, could sustain premium growth through 2028.
Datadog's revenue hit $2.8 billion growing at 25%, with AI-native monitoring products already contributing 8% of new ARR. The platform consolidation thesis is playing out faster than expected.
With 79% gross margins, $1 billion in free cash flow, and a first-mover position in AI observability, Datadog is building the monitoring layer that every AI deployment needs.