Datadog's AI Hype Train: Or, How to Make Investors Drool
Okay, so Datadog's stock jumped like a caffeinated kangaroo. 22-23%? Seriously? All because of a "revenue beat" and some rosy Q4 predictions? Give me a break. Datadog's stock soars 23% on revenue beat, posts second-best day ever - CNBC
The Numbers Game
Let's be real. Q3 revenue up 28% year-over-year. Adjusted EPS crushing expectations. Yawn. This is the tech world; these numbers are practically expected. It's like celebrating a toddler for learning to walk. The bar is so low, a worm could slither over it. Net income down from last year, though? Nobody seems to be talking about that, are they?
And this whole "AI-native" segment accounting for 12% of revenue? That's the real story, folks. Slap the "AI" label on anything these days and watch the money printers go brrr. What does "AI-native" even mean in Datadog's world? Are we talking sentient code debugging itself? Doubt it. Probably just some fancy algorithms doing what they've always done, but now with a sexier marketing campaign.
They launched "Bits AI Agents for SRE." Right. An AI assistant for alert investigation and incident response. Sounds great in theory. But I'm picturing a bunch of overworked SREs still drowning in alerts, except now they have a chatbot spitting out generic suggestions. Is it actually helping them solve problems faster, or just adding another layer of complexity? I'd love to see some real data on that, not just PR fluff.
And "MCP Server and foundation model TOTO?" Seriously, TOTO? Are they naming their AI after a freaking dog from The Wizard of Oz? It's insulting, frankly.
The Hype Machine
Here's the thing that really grinds my gears: the market's reaction. "Extremely bullish" sentiment on Stocktwits? "Extremely high" message volume? It's like watching a flock of sheep blindly following the leader. Nobody's actually digging into the details, questioning the long-term viability, or considering the potential downsides. They just see "AI" and dollar signs, and they go nuts.
Speaking of sheep, I saw some dude on LinkedIn the other day bragging about how his company uses Datadog to "monitor their cloud infrastructure." Cool story, bro. Does he even know what Datadog is actually doing under the hood? Probably not. He's just happy to have a dashboard with pretty charts and graphs. It's all about appearances, baby.
And don't even get me started on the "analysts." They're all tripping over themselves to raise their price targets. "Strong Q4 forecast!" "AI driving growth!" It's like they're reading from the same script. Are they actually doing independent research, or just regurgitating whatever Datadog's investor relations team feeds them? I'm betting on the latter.
This whole thing reminds me of the dot-com bubble all over again. Except instead of Pets.com, we have AI-powered… monitoring tools. The names change, but the game stays the same. Pump up the hype, fleece the investors, and cash out before the whole thing implodes.
So, What's the Catch?
Look, I'm not saying Datadog is a bad company. They're clearly doing something right. But this level of exuberance? It's just not sustainable. The market's acting like Datadog has discovered the cure for cancer or something. It's a monitoring tool, people. A fancy, AI-powered monitoring tool, but still just a monitoring tool.
Then again, maybe I'm the crazy one here. Maybe I'm just too cynical. Maybe Datadog really is the future of… whatever. But I ain't buying it. Not yet, anyway.