Datadog stock jumps 10% on tech company’s inclusion in S&P 500 index

Datadog's stock experienced a notable 10% increase during after-hours trading on Wednesday, following the announcement by S&P Global that the company will replace Juniper Networks in the S&P 500 index. This significant change will take effect before the market opens on July 9. The shift comes after Hewlett Packard Enterprise (HPE), another component of the index, confirmed its acquisition of Juniper Networks for $13.4 billion. This major deal was finalized after HPE and the U.S. Justice Department reached a settlement, allowing the acquisition to proceed despite initial opposition. The S&P 500 has been progressively increasing its representation of technology companies as the industry continues to integrate into various sectors of society. Notably, DoorDash recently joined the index in its last rebalancing in March, while other tech firms like Workday, Palantir, and Dell have also been added in recent months. The addition of a company to a prominent index often leads to stock price rallies, as fund managers adjust their portfolios to align with the new benchmarks. Datadog, which went public in 2019, reported a net income of $24.6 million and revenue of $761.6 million in the first quarter of 2025. Despite its recent stock performance lagging behind the broader tech sector, with Datadog down 5.5% as of the last market close compared to a 5.6% increase in the Nasdaq, the company's market capitalization stands at $46.6 billion, significantly exceeding the median valuation for companies within the S&P 500. Competitors in the space include major players like Cisco, Elastic, and cloud service providers such as Amazon and Microsoft.