Datadog Joins S&P 500, Stock (NASDAQ:DDOG) Soars Pre-Market

Datadog's stock price (NASDAQ: DDOG) is a notable pre-market mover, up 11% in early trading on a big announcement. The company, a leading provider of monitoring and security platforms for cloud applications, are riding high following the announcement that the company will be included in the S&P 500 index.

The news, which broke on last night, sent Datadog's stock price surging, and comes as Juniper Networks (JNPR) exits the index following its acquisition by Hewlett Packard Enterprise Co. (HPE). This marks a pivotal moment for Datadog, solidifying its position as a key player in the increasingly critical cloud observability space.

The inclusion in the S&P 500 is more than just a symbolic victory; it represents a substantial influx of investment. Index funds and exchange-traded funds (ETFs) that track the S&P 500 will now be required to purchase Datadog shares to mirror the index's composition.

This automatic buying pressure is a significant driver behind the recent stock surge, and analysts expect it to provide continued support for the stock price in the near term.

Juniper Networks' departure from the S&P 500 was triggered by its acquisition by Hewlett Packard Enterprise (HPE). HPE, already an S&P 500 constituent, absorbed Juniper, leading to the latter's removal from the index.

Datadog's ascent to the S&P 500 reflects its impressive financial performance and consistent growth. The company's recent quarterly earnings, reported on May 6, 2025, showcased revenue of $761.55 million, a robust 24.6% increase year-over-year.

Earnings per share (EPS) also exceeded expectations, coming in at $0.46, beating estimates by 6.67%. This strong performance prompted Datadog to revise its full-year guidance upward, signaling confidence in its continued momentum. The next earnings report, anticipated in early August, will be closely watched by investors seeking further confirmation of Datadog's growth trajectory.

Analysts' estimates for Datadog's future performance are generally positive, although with a wide range of opinions. 12-month price targets range from $115 to $200, with the consensus ($139.28) now being outpaced by the extended hours trading move.

Bull Case for Datadog (DDOG) Expands

• S&P 500 Inclusion: Automatic buying pressure from index funds and ETFs provides strong support for the stock price.
• Strong Financial Performance: Consistent revenue growth and exceeding earnings expectations demonstrate the company's financial health.
• Leadership in Cloud Observability: Datadog is well-positioned to capitalize on the increasing demand for cloud monitoring and security solutions.
• Positive Analyst Sentiment: Upgrades and price target revisions suggest confidence in the company's future growth.

Datadog's inclusion in the S&P 500 is a significant catalyst that has propelled its stock price higher. While challenges remain, the company's strong financial performance, leadership position in the cloud observability market, and positive market sentiment suggest a bright future.