Datadog’s blockbuster results and guidance sent shares up by 30%, their biggest one-day pop since the enterprise went public in 2023.

Investors say Datadog and Twilio are showing how to deploy AI-native solutions while also articulating a path to monetization.

Datadog surged 31% on Thursday after reporting blockbuster earnings and lifting its guidance for the year, showing how some software names are starting to prove their case as winners in artificial intelligence.

Quarterly revenue topped $1 billion dollars for the first time.

Datadog provides the cloud infrastructure that AI models from OpenAI and Anthropic run on. OpenAI is its biggest customer.

Datadog CEO Olivier Pomel revealed on the earnings call that the enterprise landed two major hyperscaler customers for training in their superintelligence labs.

“This was an eye, according to analysts-popping print,” wrote Andrew Sherman, analyst at TD Securities, who called it a “must-own stock.”

Investors say the performance from Datadog and Twilio underscores how companies that can deploy AI-native solutions while also articulating their path to monetization can ease disruption fears, for now.

Twilio building up AI agents

At Twilio’s annual conference on Wednesday, the communications software business unveiled latest platform capabilities that help AI agents communicate and work together more effectively. The updates include logging customer data, facilitating handoffs and creating lists of actionable data.

Twilio CEO Khozema Shipchandler told CNBC that these enhancements will dramatically improve the customer experience by making agents better at solving customer issues.

Experts say arming agents with the ability to log memory will produce customer service calls less daunting for the end user.

The digital systems will help in scenarios where a person calls an airline, for example, speaks to an agent while troubleshooting an issue, and then the call drops. If the agent can save the information so the caller can continue the conversation from when it got cut off, the customer ultimately saves time and funds.

“We’re not just lowering their costs, not just serving more consumers, but actually increasing the revenue footprint,” Shipchandler commented.

Despite continued stress in the software industry, Twilio has been able to win investor confidence, with shares up about 50% in the past month, outperforming every constituent in the IGV Software ETF.

Twilio’s stock appreciation follows the release of strong quarterly earnings in which it posted its highest revenue growth in more than three years. Voice revenue in the first quarter grew by 20% from the same period a year ago.

“[Twilio] is differentiating on the breadth of its communication channels and the volume of customer data that sits within them,” wrote Rishi Jaluria, analyst at RBC Capital, in a note to investors following the company’s investor day.

Shipchandler told CNBC that fresh products are on the horizon in both governance and observability. This also touches on aspects of bull market.