Datadog shares plummeted 19.48% in pre-market trading on Thursday after the company reported second-quarter 2026 financial results that failed to meet the elevated expectations fueled by a recent wave of analyst upgrades.

The company reported revenue of $1.12 billion, below the market consensus of $1.21 billion, and adjusted earnings per share of $0.65, slightly missing the $0.66 consensus. While Datadog beat the lower IBES estimates, the results triggered a sharp sell-off as investors recalibrated following aggressive price target increases from multiple investment banks in the weeks leading up to the report.

Adding to the pressure, the company's outlook for the third quarter and full year 2026 indicated a moderation in growth. Datadog guided third-quarter revenue in the range of $1.14 billion to $1.15 billion and non-GAAP EPS of $0.63 to $0.65, with full-year revenue expected between $4.45 billion and $4.47 billion. The combination of a revenue miss against consensus and cautious forward guidance prompted a significant reset of market expectations.