Datadog stock gains security relevance as cloud risks mount

Datadog has added a new security research catalyst to its investment story. In a press release published on November 10, the company said its State of Cloud Security 2026 report found that the median number of high or critical vulnerabilities in cloud services rose from 4 in February 2026 to around 16 in November. The research covers a sample of thousands of organizations using Amazon Web Services, Microsoft Azure or Google Cloud.

Datadog stock traded at 164.10 euros on Lang & Schwarz at 13:40 CET on Thursday, November 12, 2026.

Vulnerabilities rise as AI expands

The report links the increase to the growing volume of software vulnerabilities and the speed at which AI-assisted development is changing cloud environments. Datadog said the rise affects real-world applications rather than representing only a theoretical increase in entries in vulnerability databases.

The company also highlighted the security implications of cloud-hosted AI inference services. More than one in five organizations in the study use such services. Nearly half of organizations using Google Gemini rely on long-lived Gemini API keys, while 17% of organizations using Amazon Bedrock use long-lived Bedrock API keys. These credentials can remain valid until they are revoked, potentially extending an attacker's access after a breach.

Andrew Krug, Datadog's head of security advocacy, urged teams to use temporary access wherever possible when building AI applications. Datadog Chief Information Security Officer Emilio Escobar said organizations need to combine remediation of known flaws with controls that limit how far an attacker can move after compromising an application.

Supply chains add another risk

Software dependencies form a second pressure point. Datadog said cloud workloads rely on an average of 149 software packages, with more than half introduced indirectly through other packages. The report also found that 60% of organizations run cloud applications with a package version released less than 24 hours earlier, while 21% of all cloud applications use a version that new.

Datadog cited the Shai-Hulud 2.0 malware as an example of supply-chain risk because it searched for cloud credentials. The company recommends dependency cooldowns to give security teams and the broader community time to identify compromised packages before they reach production systems.

Security becomes a growth lever

For investors, the report broadens the commercial case beyond application monitoring. Datadog can use the same visibility across applications, infrastructure, identities and security controls to address risks that become more urgent as customers deploy AI systems. That supports cross-selling opportunities, although the report's findings are research observations rather than a forecast of revenue or margins.

The study found a positive trend in AWS data-perimeter adoption: 55% of organizations using AWS had adopted such controls, up from 40% in 2025. These measures can restrict access to cloud resources even when credentials remain valid, giving enterprises another reason to connect monitoring and security workflows.

The wider market backdrop remains important for high-growth software shares; investors can follow the S&P 500 for the main US equity benchmark.

Datadog's next major scheduled operating update will determine whether security expansion is translating into broader customer adoption alongside the company's observability and AI products. More news and analyses on Datadog stock.