Stock markets have been hitting record highs lately, but the Nasdaq Composite (^IXIC 1.77%) has lagged behind. Even on Monday afternoon, when the Nasdaq was up 0.2% as of 1:30 p.m. EDT, the favorite benchmark among high-growth investors still languished almost 5% below its recent all-time highs.

Nevertheless, many of the growth stocks in the Nasdaq are performing well to start the new week, and investors have high hopes that they could provide the leadership to send the index to record levels once again. Below, we'll look more closely to see why Align Technology (ALGN 1.00%) and Datadog (DDOG 1.01%) posted sizable gains on Monday.

Align gets paid -- more

Shares of Align Technology were up nearly 4% Monday afternoon. The maker of Invisalign clear aligners for orthodontic work got good news that should result in a nice boost to an already impressive cash award resulting from disputes against a key competitor.

Person smiling and showing teeth.

Align has all the smiles today. Image source: Getty Images.

Align received a favorable outcome in binding arbitration against SmileDirectClub (SDC) and various parties related to that company. Align previously held an ownership interest in SmileDirectClub, and a prior arbitration order had required Align to sell that interest back to SmileDirectClub. Align disagreed with SmileDirectClub's initial determination of the value of that interest, and although SmileDirectClub had already paid $54.2 million to date, Align wanted more.

That's exactly what Align got Monday, as the arbitrator ordered SmileDirectClub to pay an additional $45.5 million to Align to reflect the higher valuation plus interest. In addition, further interest will accrue at a rate of $3,000 per day until the amount is paid in full.

The two companies have worked hard to disentangle themselves from their past relationship for a long time now. Going forward, SmileDirectClub and Align will be competitors, and that competition could turn cutthroat given the extended disagreements between the two orthodontic device specialists.

Datadog gets a treat

Meanwhile, in the software-as-a-service space, Datadog saw its stock rise nearly 6%. Even with the upward move, the stock has regained only a small part of the ground it has lost since mid-February, but investors are increasingly optimistic that Datadog can build upward momentum.

Datadog grew dramatically during the COVID-19 pandemic, as cloud-based analytics became even more important without more traditional sources of business information and intelligence available. The company nearly doubled the number of million-dollar customers it has, and the ongoing trend toward digital transformation should make its services equally valuable going forward.

Some investors are concerned that once the pandemic comes under control, Datadog could lose a key tailwind that has helped accelerate its growth. But there's reason to believe that Datadog's best days aren't over just yet. Datadog hasn't been scared to spend up on research and development, even if it means giving up current profitability as a result. Long-term investors are more confident that deferring gratification by accepting red ink for a little while longer will pay off with better profits in the years to come.

Both Datadog and Align understand that when a business is working, it pays to stick with it. Shareholders are reaping the rewards today, and further gains could be ahead if Align and Datadog can keep up their operational excellence.