Please ensure Javascript is enabled for purposes of website accessibility

Why Datadog Stock Soared on Wednesday

By Eric Volkman – Sep 30, 2020 at 5:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company is teaming up with one of the most powerful names in IT.

What happened

Datadog (DDOG -8.63%) was far from a dog of an investment on Wednesday. Shares of the cloud-computing analytics and monitoring specialist jumped more than 12% on the day due to a new tie-up with a mighty partner.

So what

That partner is none other than Microsoft (MSFT -2.36%); Datadog will now be featured in the console of Microsoft's Azure cloud platform as a "first class service."

As Datadog explained in a press release, "This means that Azure customers will be able to implement Datadog as a monitoring solution for their cloud workloads through new streamlined workflows that cover everything from procurement to configuration." Azure users, the company says, will be able to buy a Datadog plan through the console, and immediately begin receiving the metrics from it.

A dog leaping.

Datadog showed its pedigree on Wednesday. Image source: Getty Images.

According to Datadog, this is the first-ever integration of a third-party monitoring service into a public-facing cloud computing platform.

The Datadog integration in Microsoft Azure is currently in public preview; it will be widely available starting in October. Datadog did not provide more specific timing.

Now what

Datadog also has not provided any estimates as to how the partnership with the tech giant will impact its business. Given the size and scope of Azure, plus the highly complimentary nature of Datadog's offering and its convenience within the system, we can readily assume it'll be meaningful. Datadog remains a compelling play on the continued development and expanding popularity of cloud-based computing.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Datadog and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.