Datadog shares plummeted 17% after the release of its second quarter 2026 financial results, wiping billions of dollars from its market capitalization which had been hovering around $90 billion. Q2 2026 revenue came in at approximately $1.08 billion, representing 30 to 32% year-over-year growth, with non-GAAP earnings per share of $0.58, up 26% from the prior year. The market punished these results as they fell short of Wall Street’s increasingly high expectations, despite the company consistently posting billion-dollar quarters with enviable growth rates. Datadog’s growth story remains tied to the AI boom, as enterprises building AI infrastructure create more complex IT environments that drive demand for observability tools.
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