Behind major players like apple (aapl) and alphabet/google, a new collection of entrepreneurs and innovators is creating the software, applications and infrastructure to support these technological changes.
Companies like datadog (ddog) and snowflake (snow) have captured the market’s attention because they’ve been able to create elegant solutions to problems that didn’t exist a decade ago. behind.
Reading: Snowflake vs datadog
snowflake’s initial public offering even attracted berkshire
snowflake gained a following among fortune 500 companies after developing an effective method for bringing together previously siled data. No matter where data is stored, businesses can integrate and analyze it through snowflake’s data management platform without compromising security or risking endless data transfers.
The company grew rapidly after launching in 2012. It spent two years in stealth mode before making its presence known in 2014. In 2020 it was ready for an IPO and indeed that IPO initial was the largest software initial public offering event in history.
Of particular note was the fact that Warren Buffett chose to invest in Snowflake’s IPO through his holding company, berkshire hathaway (brk.b). Buffett has long stayed away from IPOs in general and tech stocks in particular, so this move inspired confidence in the company across the market.
snowflake: in numbers
In its most recent earnings call for the period ending June 30, 2021, the company’s fiscal 2022 second quarter, the news was almost entirely good. product revenue was up 103% year-over-year to a total of $255 million, and the net revenue retention rate was a promising 169%.
Expansion is key to Snowflake’s continued growth, making capturing major customers in Europe, the Middle East, Africa and Asia-Pacific an especially critical achievement. Company leaders noted that growth in these regions outpaced overall company growth, indicating momentum in nearly every corner of the globe.
40% of fortune 500 companies choose snowflake
now that snowflake has more than 200 fortune 500 clients, he is focused on growing and deepening relationships. one of the company’s strategies includes the development of customized services to support specific industries.
Currently, Snowflake specializes in the technology, advertising, financial services, retail and consumer goods, health and life sciences, media and entertainment, public sector, manufacturing and education industries, but plans to create solutions for additional industries over time.
The company’s continued success, its comprehensive growth strategy and the unique nature of its products have made investors optimistic about snowflake’s future. that has pushed share prices to a level many analysts believe is too high.
If everything goes exactly as planned, the stock is trading at a fair price. however, many things can go wrong; for example, microsoft (msft) andamazon (amzn) can create financial or other competitive challenges, and that could stifle future earnings. , perhaps irrevocably.
At current prices, snowflake is a buy for more confident and less risk-averse investors. can generate significant returns for years to come. according to analyst estimates, it has a fair value of $317 per share.
what does datadog do?
datadog’s contribution to the digital revolution is an advanced platform for monitoring almost any cloud-based application. It adds visibility to servers, tools, databases and the like using a software-as-a-service (saas) model. ).
The result is that monitoring cloud infrastructure is no longer a time-consuming, multi-step process across multiple platforms. instead, datadog’s simple one-step dashboard pulls the data together.
The company was founded in 2010, just in time to take advantage of the rapid adoption of cloud services. it has expanded organically as well as through acquisitions. Some of the companies and products integrated into the Datadog organization include Mortar Data, Logmatic, and Madumbo.
datadog held its initial public offering in the fall of 2019 and investors were very excited. on its first day of trading, share prices rose 39 percent, raising $648 million in new capital.
datadog’s net retention rates are sky high
datadog (ddog) announced strong Q2 2021 results during its early August earnings call. among other gains, revenue was up 67% year-over-year to a total of $234 million. that number also represents an 18% quarter-over-quarter increase, placing it at the top of the range included in the guidance above. .
As of June 30, 2021, datadog counted 1,610 customers in the $100,000 annual recurring revenue (arr) category. That’s an impressive increase from the 1,015 customers in that category during the same period a year ago, especially since customers over $100,000 generate about 80 percent of datadog’s own annual recurring revenue.
Total customers were approximately 16,400, compared to 12,100 a year ago, and net dollar retention rates exceeded 130%.
These figures indicate that datadog continues to achieve its goals of growth and expansion, which means good things for shareholders. since the company went public, the share price has risen more than 280 percent.
rapid growth expected for datadog
As datadog continues to develop new features and capabilities for its core monitoring platform, it simultaneously creates an advanced security solution to meet the complex demands of today’s technology-related threats. The combination of these products and services suggests that Datadog will maintain its rapid rate of growth for the foreseeable future.
While many investors are eager to join what promises to be an exciting ride, some analysts are urging caution. Datadog’s expected growth is already priced into the stock prices, and if the company faces any challenges, the stock may remain stagnant for a significant period.
With that in mind, datadog is a buy for investors who have the fortitude to survive ups and downs without panicking. buying now can mean a long wait before any significant return materializes.
snowflake vs. datadog stocks: which is better?
Both snowflake and datadog are delivering the kinds of software solutions that organizations of all sizes want, and both are likely to see impressive growth and increased earnings in the coming months. Whether that will translate into short-term shareholder returns remains to be seen, but long-term snowflake and datadog stocks are good bets for portfolios that need a little more tech exposure.
In terms of which is better, the answer is not simple. Both companies face a variety of risks that could depress share price gains. When analysts weigh in, they split fairly evenly between buy and hold for both companies, but all things being equal, they expect more upside with Datadog. That makes datadog stocks a slightly smarter buy than snowflake stocks, but only by a small margin.
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