Datadog, a leading provider of cloud-based monitoring and analytics solutions, has been added to the S&P 500 index, marking one of only five companies to join this year. The addition comes after the company’s impressive growth trajectory, driven by its robust underlying fundamentals.
To be considered for admission to the S&P 500, Datadog must meet specific criteria, including being a US-based company with a market cap of at least $20.5 billion, highly liquid, and profitable based on Generally Accepted Accounting Principles (GAAP). The company meets these requirements and is poised for continued growth in the digital transformation landscape.
Datadog’s monitoring and analytics platform tracks cloud-based business systems, processes millions of data points every hour, and notifies developers of issues before they result in critical downtime. The company has received industry accolades, including being named a leader in Gartner’s 2024 Magic Quadrant for observability platforms.
Recent financial results paint a convincing picture, with revenue growing 25% year over year to $762 million and free cash flow increasing 30%. The strong financial performance is driven by robust business execution, including an increase in customer base and annual recurring revenue. Existing customers are expanding their relationships, with 83% using two or more products.
Wall Street remains bullish on Datadog, with 38 out of 46 analysts rating the stock a buy or strong buy. The company’s growth trajectory and increasing total addressable market (TAM) are cited as key factors in the optimistic call. While the stock is not cheap, its valuation metrics suggest potential upside.
Overall, Datadog’s long history of growth, strong secular tailwinds, and Wall Street’s bullish take make it a compelling investment opportunity.
Source: https://www.fool.com/investing/2025/07/05/the-newest-stock-in-the-sp-500-has-soared-315-sinc