Datadog and Cloudflare Rise 5% as CoreWeave’s Results Lift Software Stocks; CrowdStrike Climbs 4%
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Cloud and cybersecurity software stocks are rallying as a beat-and-raise quarter from CoreWeave (NASDAQ:CRWV) eases fears about the AI expansion and how it gets funded. Datadog (NASDAQ:DDOG | DDOG Price Prediction) stock is at $187.79 in afternoon trading, up 5%. Even with that gain, Datadog stock is down 36% over the past month, so the bounce starts from a deep hole.
Fortinet (NASDAQ:FTNT) stock is at $129.94, up 5%. Over the past month, Fortinet stock is down 33%. Cloudflare (NYSE:NET) stock is at $320.88, up 5%. Rounding out the group, CrowdStrike Holdings (NASDAQ:CRWD) stock is at $235.17, up 4%.
CoreWeave’s Quarter Sparks a Broad Software Rebound
CoreWeave reported its beat-and-raise quarter after the close on November 10, relieving worries about AI infrastructure spending and how it gets financed. Tech stocks are rallying broadly on the report. Software names tied to AI workloads are benefiting (we highlighted seven suppliers supporting the AI expansion, from networking to cooling, in a free report you can grab here). Datadog monitors cloud and AI applications, Cloudflare runs a global network that handles growing AI traffic, and CrowdStrike and Fortinet secure the expanding infrastructure.
CrowdStrike is moving in step with that group rallying. The gains coincide with Chicago Fed President Austan Goolsbee calling the latest inflation report “borderline disturbing” while the Federal Reserve weighs more rate hikes.
Datadog Bounces Off Its AI Customer Reset
Datadog’s slide traces back to its Q3 2026 report on November 4. Revenue at Datadog rose 35% year over year to $1.2 billion, but management said several large customers, including AI customers, renewed early at lower pricing in exchange for bigger commitments. Datadog’s Q4 2026 guidance assumes revenue from its largest customer only at that customer’s minimum commitment, even though the account spent above that level in Q3.
The early renewals reflect a longstanding approach. CFO David Obstler described it on the call: “Our motion is to increase the commitment of customers, broaden the platform, and extend the contract.” On the same call, CEO Olivier Pomel said Datadog now serves over 850 AI customers.
What the Peer Group Says About Datadog
Momentum looks newer at Cloudflare. Cloudflare’s Q3 revenue rose 39% to $782.5 million, its fastest growth in nearly four years, and the company raised its full-year outlook on November 5 while guiding its Q4 revenue to $845 million to $846 million. CEO Matthew Prince said, “Our engine is firing on all cylinders, and we’ve found an even higher gear for this next phase of growth.”
Margins tell a more mixed story, as Cloudflare’s generally accepted accounting principles (GAAP) gross margin slipped to 71.2% from 74% a year earlier while network costs rose with AI traffic. Fortinet raised its 2026 outlook after a strong Q3 report on October 28, which makes its month-long decline stand out against those results. CrowdStrike posts the smallest gain of the four, while Datadog leads the group despite carrying the biggest recent losses.
How Datadog’s Business Differs From Cloudflare and CrowdStrike
Datadog sells subscriptions priced on committed amounts and usage, so its revenue rises and falls with how heavily customers run their cloud and AI workloads, a design that helped Datadog ride the AI boom but also exposes the company when a large AI account cuts its consumption.
Cloudflare’s model leans on a global network and a developer platform, with Pool of Funds contracts letting customers spread spending across security, networking and developer products, while CrowdStrike sells modules of its Falcon platform by subscription and Falcon Flex licensing lets customers add more modules over time. Fortinet stands apart as the most hardware-heavy of the group, pairing FortiGate firewall appliances built on its own FortiASIC chips with FortiGuard security subscriptions and FortiCare support.
Can Datadog’s Rebound Outlast Its AI Customer Reset?
Datadog now faces the question of whether AI customers that renewed early will expand usage again in coming quarters. Optimists cite Pomel’s remark that AI workloads moving to production “drive more cloud consumption and more usage of the data platform,” along with platform adoption that keeps broadening across Datadog’s customer base.
The bears have their own case, since Datadog’s Q4 guidance leans on a cautious read of its largest customer and higher rates could weigh on growth-oriented software stocks. A sharp bounce in Datadog stock doesn’t settle whether the month-long selloff has run its course.
It’s worth researching how spending from Datadog’s largest customer develops in coming quarters. If you’re planning to invest in DDOG stock, it’s wise to be cautious as volatility risk is clear and present.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk. His work has appeared in 24/7 Wall St., The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, MarketScreener, TalkMarkets, Finmasters, and others. With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
