Conviction / Adjacent Beneficiaries
DDOG
Datadog Inc.
conviction · held at 6.6%
Datadog sells the software that watches whether other software is working and charges by how much gets processed rather than by headcount, so revenue rises as machine workloads rise. Growth was 32% in its last report, but the shares sit near an all time high above where most analysts think they should be, and the next results land tomorrow.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $286.57 |
| 30-day move | +11.6% |
| Position in 52-week range | 98 |
| From the 52-week high | -1.1% |
| Average daily volume | $1.2B |
| Weight in the book | 6.6% |
| Since last rebalance | +10.7% |
Why it is in the fund
Thesis
Observability platform becomes essential as enterprises deploy fleets of autonomous AI agents that need real-time monitoring.
Standing judgment
Within 2% of the all time high at roughly 116x forward earnings and 24x forward sales, into a print tomorrow. Consumption pricing means a spending pause among the fastest growing customer cohort appears in revenue within a single quarter, which is the specific mechanism to watch rather than a vague valuation worry.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 68 | -6 | Cut because the entry has become the dominant fact: at roughly 24x forward sales with the consensus target below the current price and the growth attribution now publicly contested, this is constructive but unresolved rather than clearly ownable. | Most recent reported quarter is Q1 2026 on 2026-05-07: revenue $1,006M (+32% y/y) against $959.6M expected, ARR $4.23B (+32.2%), about 4,550 customers above $100k ARR versus about 3,770 a year earlier, FY26 guidance raised to $4.30-$4.34B. Q2 2026 has not reported and lands 2026-08-06. Jefferies dow |
| 2026-08-05 | 74 | flat | first v3 judgment (v2 score was uninformative, see L-001): Revenue growth reaccelerated to 32% with management explicitly attributing it to AI-native and AI-adopting cohorts, and the pricing model is consumption rather than seats, which puts Datadog on the right side of the 2026 pricing shift. | Q1 FY2026 revenue $1.006B, up 32% y/y, first $1B quarter; FY2026 guide raised to $4.30B-$4.34B (25-27%); ~4,550 customers at $100k+ ARR, up 21% y/y; Q2 FY26 guide $1.07B-$1.08B (29-31%). Stock +66% over the period and +31% in one session on the May 7 2026 print. |
| 2026-08-05 | 74 | -14 | first v3 judgment (v2 score was uninformative, see L-001): Revenue growth reaccelerated to 32% with management explicitly attributing it to AI-native and AI-adopting cohorts, and the pricing model is consumption rather than seats, which puts Datadog on the right side of the 2026 pricing shift. | Q1 FY2026 revenue $1.006B, up 32% y/y, first $1B quarter; FY2026 guide raised to $4.30B-$4.34B (25-27%); ~4,550 customers at $100k+ ARR, up 21% y/y; Q2 FY26 guide $1.07B-$1.08B (29-31%). Stock +66% over the period and +31% in one session on the May 7 2026 print. |
| 2026-07-31 | 88 | -4 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-30 | 92 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-29 | 91 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-28 | 90 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-27 | 89 | +5 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-26 | 84 | -6 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-25 | 90 | +5 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-24 | 85 | -5 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-23 | 90 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-22 | 89 | +3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 86 | -5 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 91 | +7 | migrated from v2 (cause not recorded) | v2 `scores` row |