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Why Datadog Stock Rose Monday

By Chris Neiger - Mar 15, 2021 at 3:42PM

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Investors are heading back into the tech sector.

What happened 

Shares of Datadog (DDOG 1.01%) jumped on Monday on seemingly no company-related news. The cloud-based software platform company's shares may have risen as some investors are moving back into tech stocks, after exiting the sector over the past couple of weeks. 

The tech stock was up by 5.8% as of 3:16 p.m. EDT. 

So what 

Toward the end of February, investors started exiting the tech sector as bond yields began to rise. To some investors, the rising yield rates indicated that the economy was picking up momentum and that other sectors outside of tech might soon start growing as well. 

An image of a multicolored cloud.

Image source: Getty Images.

That led to many investors selling off technology stocks and investing in other, more stable, sectors. But it appears that this trend may be reversing -- at least for now. 

Technology stocks started gaining ground again last week and that rally looks like it's extending into this week as well. Datadog's share price bump is likely a result of investors thinking once again that high-growth tech stocks are the best place to put their money right now. 

Now what 

Datadog investors should be cautious not to buy or sell their shares simply based on the price of bond yields, or any other daily news for that matter. The company reported strong revenue growth of 56% in the fourth quarter (reported on Feb. 11) and both sales and earnings beat Wall Street's consensus estimates. Remember that some fluctuations in the market are normal and long-term investors shouldn't be too focused on those share price changes either way.

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