---
title: "Datadog fell 14% on no news of its own. Upwind just priced its theme at 40 times revenue"
description: "Upwind raised $400 million at 40 times projected revenue rather than sell to Datadog, and two days later the public market's price for the same theme, Datadog's stock, fell 14% in a month on unchanged earnings estimates. The third-quarter print lands November 4."
publisher: "The Inference"
section: "Platforms"
published: 2026-11-01T19:00:05.106Z
modified: 2026-11-01T19:00:05.106Z
canonical: https://theinference.org/article/datadog-fell-14-on-no-news-of-its-own-upwind-just-priced-its-theme-at-40-times-revenue
language: en
keywords: "Datadog, Upwind, Cloud Security, Venture Capital, Valuation"
---

# Datadog fell 14% on no news of its own. Upwind just priced its theme at 40 times revenue

> Upwind raised $400 million at 40 times projected revenue rather than sell to Datadog, and two days later the public market's price for the same theme, Datadog's stock, fell 14% in a month on unchanged earnings estimates. The third-quarter print lands November 4.

## The round that priced cloud security at 40 times revenue

On October 28 Upwind, a two-year-old San Francisco startup that secures cloud workloads while they run, [closed a $400 million Series C](https://digitalmarketreports.com/news/100798/upwind-raises-400-million-at-3-8-billion-valuation-after-rejecting-datadog-acquisition-offer/) at a $3.8 billion valuation led by Bessemer Venture Partners, nine months after a $250 million round at $1.5 billion and taking total capital raised past $800 million [1]. Founder Amiram Shachar sold Spot.io, a cloud cost management company, to [NetApp](https://theinference.org/markets/companies/netapp) for about $450 million in 2020 and started Upwind two years later [1].

The same theme now carries a second price tag, and it belongs to the public market. [Datadog](https://theinference.org/markets/companies/datadog), which sells the software engineering teams use to monitor and secure cloud infrastructure, tried to buy Upwind and would not offer a premium above the $3.8 billion venture price, TechCrunch reported, citing a person familiar with Upwind; Upwind raised instead [1][2]. The Israeli outlet CTech reported on October 22 that no offer was made, and neither company confirms the talks [1][2].

## Two prices for one theme

The complication is arithmetic. Upwind is projected to end 2026 at roughly $90 million of annualized recurring revenue, so the round prices it above 40 times revenue; a peer, [Cyera](https://theinference.org/markets/companies/cyera), reportedly cleared about 80 times earlier this year [1]. Datadog, profitable with about 80% gross margins, [trades near 21 times trailing sales](https://www.ainvest.com/news/datadog-fell-12-ai-trade-sector-company-2610/) [3], even as its own filings show revenue growth accelerating to 35.6% year over year in the June quarter [4]. The venture market pays two to four times what the stock market pays for the same dollar of cloud security revenue.

*Chart: **The private market pays two to four times what Datadog's stock pays** Bars comparing valuation multiples: Datadog 21x trailing sales, Upwind over 40x projected ARR, Cyera about 80x ARR*

*Revenue multiples, times annualized revenue. Datadog: trailing sales per AInvest, November 1, 2026. Upwind: $3.8 billion valuation over projected year-end 2026 ARR of about $90 million, an estimate. Cyera: reported ARR multiple per Digital Market Reports, November 1, 2026. Different revenue bases, all annualized. [1][3]*

## Estimates held, the multiple fell

Datadog closed at $235.27 on October 30, [down 11.50% on the day and 14.1% for the month](https://finance.yahoo.com/markets/stocks/articles/datadog-stock-fell-nearly-12-071819615.html), on [Amazon](https://theinference.org/markets/companies/amazon)'s and [Intel](https://theinference.org/markets/companies/intel)'s results, not any Datadog announcement, as the Nasdaq logged its worst session since June [2][3]. The forward price/earnings multiple fell from about 103 times to about 89 times while the next-12-month EPS estimate held at $2.65 and consensus revenue edged up [2]. The wider selloff was a repricing of the trade: [Alphabet fell 13% on a revenue and profit miss, and Amazon double-missed](https://finance.yahoo.com/markets/article/a-big-sell-off-collides-with-more-big-tech-earnings-and-a-midterm-election-what-to-watch-this-week-110000657.html) despite AWS growing 40% [5].

Chief Technology Officer Alexis Le-Quoc [sold 43,224 shares on October 28](https://www.sec.gov/Archives/edgar/data/1561550/000156155026000326/0001561550-26-000326-index.htm) at an average near $278.90, under a 10b5-1 plan dated June 2025, so scheduled, but at a price the market no longer quotes [6].

*Chart: **Datadog's quarterly revenue rose from $690 million to $1.12 billion in eight quarters** Line chart of Datadog quarterly revenue from Q3 2024 at 0.69 billion to Q2 2026 at 1.121 billion dollars, with year-over-year growth of 26 percent and 35.6 percent annotated at the first and last quarters*

*Quarterly revenue, USD billions, as reported in Datadog's SEC filings, retrieved November 1, 2026. Annotations give the year-over-year growth rate for the first and last quarters shown. [4]*

## The bear case is real

Datadog's growth is usage-driven and roughly 90% of revenue comes from large accounts, so a genuine pullback in cloud and AI spending would slow it at any margin; at 21 times trailing sales the stock is not cheap [3]. As AInvest put it, Friday sold the speed, not the company, and the print decides whether this was an overcorrection or the start of a lower multiple [3].

## The door opens November 4

Datadog reports before the open on November 4, on guidance of $1.135 billion to $1.145 billion against consensus near $1.15 billion, with remaining performance obligations modeled at about $3.55 billion versus $2.79 billion a year earlier; watch the 2027 EPS estimate, now about $2.98 [2][3].

History cuts both ways. Seven years ago [Cisco proposed buying Datadog for $7 billion as it prepared to go public](https://www.bankinfosecurity.com/blogs/datadog-eyeing-4b-buy-cloud-defense-firm-upwind-p-4225); Datadog chose the market, and its valuation has risen more than 13-fold since its first day of trading [7]. Shachar told ISMG in January that whoever builds the best cloud security platform is a $100 billion company [7]. Upwind is betting on that path with venture money at 40 times revenue [7]. On November 4, the public market answers for its side of the ledger [7].

## Takeaway

The venture market just paid two to four times the public market's price for a dollar of cloud security revenue, and Datadog's November 4 print decides whether its 14% haircut was an overcorrection.

## Sources

1. [Digital Market Reports, "Upwind Raises $400 Million at $3.8 Billion Valuation After Rejecting Datadog Acquisition Offer", 31 October 2026 (as collected 1 November 2026)](https://digitalmarketreports.com/news/100798/upwind-raises-400-million-at-3-8-billion-valuation-after-rejecting-datadog-acquisition-offer/)
2. [Yahoo Finance / TIKR, "Datadog Stock Fell Nearly 12% as AI Spending Fears Hit Cloud Stocks. Its Earnings Estimates Didn't Move", 31 October 2026](https://finance.yahoo.com/markets/stocks/articles/datadog-stock-fell-nearly-12-071819615.html)
3. [AInvest, "Datadog fell 12% with the AI trade - that says more about the sector than the company", 1 November 2026](https://www.ainvest.com/news/datadog-fell-12-ai-trade-sector-company-2610/)
4. [Datadog, quarterly revenue figures from its SEC filings, retrieved via company_series, 1 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001561550)
5. [Yahoo Finance, Jake Conley, "A big sell-off collides with more Big Tech earnings and a midterm election: What to watch this week", 1 November 2026](https://finance.yahoo.com/markets/article/a-big-sell-off-collides-with-more-big-tech-earnings-and-a-midterm-election-what-to-watch-this-week-110000657.html)
6. [SEC Form 4, Datadog, Inc. (CIK 0001561550), Alexis Le-Quoc, filed 30 October 2026, accession 0001561550-26-000326](https://www.sec.gov/Archives/edgar/data/1561550/000156155026000326/0001561550-26-000326-index.htm)
7. [ISMG / BankInfoSecurity, Michael Novinson, "Why Datadog Is Eyeing a $4B Buy of Cloud Defense Firm Upwind", 22 October 2026](https://www.bankinfosecurity.com/blogs/datadog-eyeing-4b-buy-cloud-defense-firm-upwind-p-4225)


---

Datadog fell 14% on no news of its own. Upwind just priced its theme at 40 times revenue — The Inference. Canonical: https://theinference.org/article/datadog-fell-14-on-no-news-of-its-own-upwind-just-priced-its-theme-at-40-times-revenue