Jim Cramer addressed a caller's question about Datadog, Inc. (NASDAQ:DDOG) during a recent segment. The stock has been declining, prompting the inquiry.
"We're not, we're going to stay away from these enterprise software companies," Cramer said. "They seem to be almost in freefall, and I don't need to break the fall."
ClearBridge Investments discussed Datadog in its third quarter 2025 investor letter. The firm initiated new positions in infrastructure software providers Oracle and Datadog during the quarter and added to Broadcom.
Datadog operates a monitoring, observability, and data security platform for cloud applications. Observability is described as a large and growing end market, with penetration rising as application use and complexity increase.
ClearBridge stated that Datadog is a leader in cloud application monitoring, offering ease of use, breadth, and scalability superior to competitors. The firm believes large language model observability, a rapidly growing market due to Gen AI workloads, creates a new growth vector not reflected in fundamental estimates.
Datadog's mission-critical offering and rapid innovation should support attractive revenue growth above 20%, according to the letter, with an attractive valuation as the company further scales margin and cash flow.