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Here's Why Appian, Datadog, Okta, and Other Tech Stocks Are Higher Wednesday

By Matthew Frankel, CFP® – Aug 26, 2020 at 12:26PM

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A big tech player just boosted the market's confidence in the sector.

What happened

The stock market was having a relatively flat day on Wednesday, with both the Dow Jones Industrial Average and the S&P 500 benchmark index hovering around neutral for much of the morning. But the Nasdaq was significantly higher, led by strong gains from several big tech stocks.

To name some of the most significant movers as of 11:15 am EDT today, Appian (APPN -1.39%) was higher by 6%, Datadog (DDOG -1.92%) was up by more than 5%, Okta (OKTA 2.09%) had gained 7%, MongoDB (MDB -0.84%) was 6% higher, and Slack Technologies (WORK) was a particularly strong performer, with shares rising by about 8%.

Person holding laptop with icons hovering over it.

Image source: Getty Images.

So what

There isn't really any company-specific news propelling these stocks higher. Rather, there seems to be an overall rise in tech sector sentiment, fueled by the blowout earnings report issued by Salesforce.com (CRM -1.31%) on Tuesday afternoon.

Salesforce stock rocketed by more than 25% on Wednesday morning, and this was on the heels of another strong gain after it was announced the company would be added to the Dow Jones Industrial Average. Now, the customer relationship management giant is trading at a fresh all-time high, and by a wide margin.

In a nutshell, Salesforce delivered results that far exceeded expectations. Revenue was up 29% year over year for the quarter, operating margins expanded by 200 basis points, and the company increased its revenue guidance for the current fiscal year. There was very little, if anything, not to like about Salesforce's numbers.

Now what

Since earnings season ended a few weeks ago, Salesforce provided an interim glimpse at how tech companies could be doing in the third calendar quarter. (Salesforce's fiscal second quarter ended July 31, so it shows results from a month later than most other companies' second-quarter reports.)

While nothing company-specific is fueling today's moves, if other software companies' numbers are as impressive as Salesforce's in the upcoming third-quarter earnings season, there could be more room to climb.

Matthew Frankel, CFP owns shares of Appian. The Motley Fool owns shares of and recommends Appian, Datadog, MongoDB, Okta, Salesforce.com, and Slack Technologies. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Salesforce, Inc. Stock Quote
Salesforce, Inc.
CRM
$151.68 (-1.31%) $-2.01
Okta Stock Quote
Okta
OKTA
$51.25 (2.09%) $1.05
Appian Stock Quote
Appian
APPN
$36.98 (-1.39%) $0.52
MongoDB Stock Quote
MongoDB
MDB
$142.30 (-0.84%) $-1.20
Slack Technologies Stock Quote
Slack Technologies
WORK
Datadog Stock Quote
Datadog
DDOG
$72.06 (-1.92%) $-1.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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