Cloud Security Software Firm Datadog Joins the S&P 500, Much to the Surprise of Index Hawks

The high court of American capitalism has made its ruling — and nominated a new inductee to its esteemed order… The S&P 500 selection committee has chosen a replacement for outgoing member Juniper Networks, which was just acquired by HPE for $13.6B. Surprise, surprise — it’s another IT name: DatadogDDOG

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• Datadog provides security and monitoring software that gives developers and IT teams visibility into their cloud infrastructure and helps ensure reliability.
• The company’s revenue rose to $761.5M in its latest quarter (+25% year-over-year), while net income narrowed to $24.6M (-42% YoY).

But do they got that dawg in them? Many investors were surprised byDDOG

’s inclusion, especially since there are a dozen more valuable firms that could’ve made the cut. Still, the selection likely helped send shares up 14%, putting Datadog’s market cap at $52B as of Monday’s close. Its strong revenue growth makes it a standout — but at 315x price-to-earnings, it’ll need to grow profits fast to live up to that lofty new valuation.