Quick Read
-
Datadog slumps 12% and CrowdStrike drops 4% despite a $6.3 billion Binance hack that spotlights the cyber threats both companies are built to stop.
-
Fortinet extended its post-earnings slide while Alphabet shed $500 billion in market value after AI costs pushed free cash flow to negative $9.1 billion.
-
Datadog's revenue grows with cloud usage, making it more sensitive to hyperscaler spending fears than security-focused rivals whose budgets companies treat as non-discretionary.
-
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Palo Alto Networks didn't make the cut. Enter your email to see the names that beat PANW. The report is free. Enter your email and see if any of your stocks made the cut.
A headline-grabbing crypto theft is putting digital defense in the spotlight, yet security-linked software stocks are falling with the rest of tech. Datadog( NASDAQ:DDOG ) stock is at $233.41 in afternoon trading, down 12%. The cloud monitoring company is leading the retreat even though it's still up 72% year to date (YTD).
At the same time, CrowdStrike( NASDAQ:CRWD ) stock is at $249.58, down 4%. The endpoint security leader remains up 113% YTD. Network security heavyweight Palo Alto Networks( NASDAQ:PANW ) is lower as well. Firewall maker Fortinet( NASDAQ:FTNT ) is extending a steep slide that followed its latest earnings report.
Binance Breach Meets Big Tech's AI Spending Hangover
State-backed hackers stole $6.3 billion from Binance and moved more than $3 billion beyond reach, according to reports that circulated on October 30. Coverage of the breach singled out Datadog because crypto exchanges, brokers and fintech firms use its monitoring and security tools, though a hack headline rarely lifts security stocks when the whole technology group is being repriced.
Free Report, Just Released
Why Didn't PANW Make The Top 10 List?
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now . Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
And PANW didn't make the cut!
The report is free, and you can see why we think each stock is a top investment today.
Enter Your Email and See the Ten →
Earnings from the giant cloud operators known as hyperscalers set that repricing in motion. Alphabet( NASDAQ:GOOGL ) lost more than $500 billion in market value on October 29 after reporting quarterly free cash flow of negative $9.1 billion. Wall Street analysts had expected negative $3.5 billion. Yahoo Finance's Brian Sozzi argued the broader tech rout owes more to hyperscalers' ballooning artificial intelligence (AI) bills than to one chipmaker's weak outlook.
Datadog is especially exposed to that mood because its revenue grows as customers run more workloads in the cloud, and when the market questions how much the cloud giants will keep spending on AI, a usage-driven platform like Datadog feels it quickly. Cloud providers and AI labs are also building more of their own defenses, adding a competitive worry for independent security vendors. The flip side of that spending debate involves suppliers. Behind the expansion, we covered seven of them, from power to cooling, in a free report on the AI infrastructure trade.
CrowdStrike, Palo Alto and Fortinet Fall Less Than Datadog
CrowdStrike is falling less than Datadog, and its recent results give the bulls plenty to cite. Net new annual recurring revenue (ARR), which measures subscription value added in a period, hit a record $332.8 million at CrowdStrike in Q2 FY2027, the quarter ended July 31. CEO George Kurtz has discussed the October rush. He has said the rush to patch flaws found by AI models, which he calls "Black October," is "only the beginning." The valuation may be a concern, with CrowdStrike stock trading at 190x forward earnings, which suggests that plenty of good news is already priced in.
Palo Alto stock is at $367.96, down 3%. The platform security company is still up 100% YTD, and a run that steep invites profit-taking in a crowded winner.
Meanwhile, Fortinet stock is at $135.26, down 3%. The firewall maker remains up 70% YTD, though it had already dropped sharply after its Q3 2026 report on October 28. On that call, management cited slower conversion of service billings into revenue and gross margin pressure from rising component costs, even as Fortinet's billings grew 29%.
Datadog Monitors the Cloud While Rivals Guard the Perimeter
Datadog sells observability software that lets engineering teams track applications, infrastructure and logs, with security and AI tools layered on top. CrowdStrike builds around its Falcon platform for endpoint, identity and cloud protection. Palo Alto follows a platform strategy spanning network, cloud and AI security, while Fortinet bases its business in FortiGate firewall appliances and proprietary chips.
That difference shapes how each stock trades. Consumption of cloud resources drives much of Datadog's growth, tying it to hyperscaler spending moods, while customers often treat security budgets as must-have spending. The broader lesson for retirement-minded savers is that premium-valued growth stocks can fall together on sector-wide sentiment even when each company's own demand story looks strong.
What Comes Next for Datadog and Security Software
The next test for Datadog is whether its upcoming quarterly report shows customers still expanding their cloud usage. On August 6, the company lifted its 2026 revenue outlook to $4.45 billion to $4.47 billion. Palo Alto has its own quarterly report ahead as well.
The bulls could argue that AI-driven threats and breaches like the one at Binance could push security budgets at companies such as CrowdStrike and Datadog higher. Stretched multiples and homegrown cloud defenses form the bear case, and either could keep pressure on the group. Key signals to watch for include hyperscaler spending plans, upcoming security earnings and any sign that high-profile hacks are turning into bigger security budgets. Investors may want to stay cautious until the debate over hyperscaler AI spending resolves.
Got $1,000? Before You Buy PANW, Read This
If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And PANW wasn't one of them.
They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the list -->>
Contact editorial@247wallst.com for any questions or corrections.
