Datadog Is Winning Larger Deals As It Builds Market Share

Datadog stock, off 59% YTD, has been holding above the 52-week low of $66.45.

Shares of Datadog (DDOG, $72.42), a leading provider of an observability and security platform for cloud applications, remain volatile. The stock, down 59% YTD, has been holding above the 52-week low of $66.45 reached on November 9, but recently retreated from its mid-November high of $86.88.

While Datadog is just getting started in the cloud security space, it already has a strong presence in observability. Gartner estimates that the TAM for observability is headed to $62 billion in 2026 from about $41 billion today. Cloud spending is the main driver of this healthy expansion, but it’s still relatively small. Today, cloud spend is just 11% of total IT spend, says Gartner. By 2026, the firm looks for this figure to expand to 17%.