Tech stocks are struggling for direction this morning, but don't tell Datadog Inc (NASDAQ:DDOG). The cloud-based, software-as-a-service (SaaS) company reported adjusted third-quarter earnings of 55 cents per share on $885.65 million in revenue, both of which topped analyst estimates. Datadog also hiked its fiscal fourth-quarter guidance by a wide margin.
DDOG is up 20.6% to trade at $186.95 at last check, on track for its best single-session pop since November 2023 and earlier trading at a four-year high of $189.49. The shares are up 30.3% year to date, with support in place at their 30-day moving average, and their 80-day trendline in August and September.
What makes this rally so impressive is that it is not fueled by an unwinding of pessimism. Most of the brokerages covering DDOG maintain "buy" or better ratings, and only 3.4% of the stock's total available float is sold short.
Options traders are loading up today. At last check, over 43,000 calls have changed hands, volume that's 14 times the average intraday amount, and roughly triple the number of puts exchanged. The weekly 11/7 200-strike call is the most popular, new positions bought to open.
The good news for those traders is that DDOG has a tendency to outperform volatility expectations, per its Schaeffer's Volatility Scorecard (SVS) of 95 out of 100.
