The Nasdaq Composite (^IXIC 0.59%) has been on a tear recently, posting many record highs over the past several sessions. On Friday, though, the stock market finally took a break, and even the Nasdaq wasn't able to avoid declines. Losses for the Nasdaq-100 Index amounted to nearly 1.25%, while the Composite fell roughly 1% on the day.

Software-as-a-service companies have helped lead the Nasdaq higher, but they also proved to be a headwind to performance on Friday. Datadog (DDOG -1.21%) released second-quarter financial results that fell short of investor hopes despite showing strong growth. However, Groupon (GRPN -4.38%) was able to give shareholders a great deal as its turnaround efforts appear to be paying off.

Playing dead?

Shares of Datadog plunged 16% on Friday. Even though the cloud monitoring and security specialist's results showed continuing growth, investors seemed more concerned about the sustainability of future gains.

Dog at a laptop with a stock chart on it.

Image source: Getty Images.

Datadog's performance looked great on its face. Revenue for the quarter was up 68% from year-ago levels, as Datadog boosted the number of clients producing at least $100,000 in annual recurring revenue to more than 1,000. The company broke even using standard accounting practices and posted a modest adjusted profit. Those results were better than most investors had anticipated.

Yet some shareholders weren't pleased about Datadog's guidance. The company's outlook included third-quarter revenue estimates that would work out to about a 50% year-over-year rise, with full-year 2020 top-line growth of around 57%. Datadog's valuation is high enough that even those strong growth rates came as somewhat of a disappointment.

Datadog has a lot of potential to keep growing its business. The question is whether its stock valuation still has room for investors to benefit from that growth. At least for today, shareholders seem to think the answer to that question is no.

Here's a deal for you

On the other side of the spectrum, Groupon shares soared 56%. The one-time daily deals specialist has worked hard to try to turn its business around, and investors liked what they saw in its second-quarter report.

Fundamentally, Groupon still has a long way to go. Revenue fell 26% from year-ago levels to $396 million, and net losses nearly doubled year over year. Unit sales volume plunged 35% as the COVID-19 pandemic had a dramatic impact on Groupon's local business segment.

However, investors seem excited about Groupon's growth strategies. The company hopes to expand its inventory while improving its online marketplace to meet customer expectations. Groupon's restructuring will happen in phases and take a couple of years, but savings should start coming this year and build into 2021.

Even with today's gains, Groupon stock is still down by nearly half so far in 2020. The company will need to move fast to capitalize on its newfound optimism, or else increasingly impatient investors might simply give up on the e-commerce company ever becoming a growth stock again.