By Danny Vena, CPA, The Motley Fool
Publication Date: 2026-05-14 07:22:00
When it comes to the artificial intelligence (AI) boom, Nvidia (NASDAQ: NVDA) is the stock by which all others are measured. The company supplies the semiconductors that enabled the recent advances in AI, and it has been one of the undeniable beneficiaries of the AI revolution. Despite concerns about growing competition, uncertainty about future AI adoption, and economic and geopolitical uncertainty, Nvidia stock has gained 21% thus far in 2026 (as of market close on Wednesday), outpacing both the S&P 500 and the Nasdaq Composite, which have risen by 9% and 14%, respectively.
However, one AI stock is running circles around Nvidia. AI-powered observability and security platform Datadog (NASDAQ: DDOG) has risen like a phoenix from the ashes, soaring 51% in 2026, delivering more than double Nvidia’s gains.
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Let’s take a look to see what’s driving the recent surge and why there might be more to come.
The tide has turned
Last year was a challenging one for Datadog investors. One of the biggest issues weighing on the stock was the fear that advances in AI would render traditional software-as-a-service (SaaS) companies obsolete. This was accompanied by decelerating growth for much of the past couple of years,…
