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DDOG vs. FIVN: Which Cloud Software Stock is the Better Buy Now?
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Key Takeaways
Datadog and Five9 both stand to benefit from enterprise cloud and AI adoption trends.
FIVN's subscription model offers predictable revenue and clearer ROI from AI-driven contact centre automation.
DDOG's usage-based model supports growth but adds volatility and trades at a higher valuation multiple.
Datadog (DDOG - Free Report) and Five9 (FIVN - Free Report) are key players in the enterprise cloud software industry, offering solutions that enable businesses to optimize their cloud operations and customer engagement. While Datadog specializes in cloud monitoring and observability, Five9 focuses on cloud-based contact centre infrastructure, with each serving mission-critical functions for digital-first enterprises.
Per Grand View Research, the global enterprise software market is projected to reach $517.26 billion by 2030, witnessing a CAGR of 12.1% from 2025 to 2030. DDOG and FIVN are well-positioned to benefit from this substantial growth opportunity as enterprises accelerate cloud adoption and integrate AI into their operational frameworks. Both companies operate subscription-based SaaS models with recurring revenue streams and embedded AI capabilities designed to support intelligent automation and efficiency gains.
Let us delve deeper to assess which is a better investment now.
The Case for DDOG
Datadog operates as a unified observability and monitoring platform, enabling enterprises to manage cloud infrastructure as enterprises transition from on-premise systems to hybrid and multi-cloud environments. The consumption-based revenue model aligns with customer cloud spending, though this creates variable revenue streams that fluctuate with infrastructure consumption patterns. The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $914.55 million, indicating 23.9% year-over-year growth. While FIVN generates predictable recurring revenues through contact centre seat licensing, Datadog's usage-based approach introduces potential volatility during cloud optimization initiatives or economic uncertainty when enterprises reduce spending.
The platform strategy supports consolidation of multiple monitoring tools into a unified system, with 84% of customers utilizing over two products and 54% deploying over four solutions during the third quarter. DDOG supports over 1,000 integrations across technology vendors and cloud providers. However, the observability market faces intensifying pressure from hyperscaler-native monitoring tools offered by Amazon Web Services, Microsoft Azure and Google Cloud Platform, which are often bundled at lower costs within broader enterprise agreements. Open-source alternatives and established competitors create additional pricing pressures as core monitoring capabilities increasingly commoditize.
Datadog has embedded AI capabilities, including automated incident resolution, though monetisation pathways remain uncertain. The expansion into adjacent markets, such as security and digital experience monitoring, creates execution risk against specialised vendors with deeper domain expertise. Compared to FIVN's focused contact centre approach delivering measurable cost savings, DDOG's broader positioning across engineering and operations functions faces longer sales cycles and more complex value proposition articulation across diffused buying centers.
The Zacks Consensus Estimate for DDOG’s fourth-quarter EPS is pegged at 55 cents, up by a penny over the past 30 days and indicating 12.24% year over year growth.
Five9 operates as a cloud-based contact centre platform enabling enterprises to manage customer interactions across voice and digital channels, positioning the company to capitalize on the ongoing shift toward AI-driven customer experience transformation. The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $297.7 million, indicating 6.83% year-over-year growth. The subscription-based revenue model creates predictable recurring cash flows as enterprises commit to multi-year contracts for mission-critical customer communication infrastructure.
The platform approach delivers a competitive advantage by orchestrating interactions across both AI agents and human agents within a unified system. The contact center holds the full conversation history across every channel, enabling hyper-personalization and relationship-based experiences that isolated AI point solutions cannot replicate. While Datadog monitors infrastructure telemetry data across distributed systems, Five9's customer interaction data creates direct business impact through improved customer satisfaction and revenue generation, making the value proposition more immediately tangible to enterprise stakeholders. This data advantage creates a powerful flywheel effect where every engagement enriches subsequent interactions, strengthening performance and personalisation over time.
Strategic partnerships represent a significant growth catalyst, with the ServiceNow relationship reaching a major milestone with the launch of Five9 Fusion for ServiceNow.The partnership ecosystem extends to Salesforce and Google Cloud, expanding market reach through established enterprise relationships. Five9's focused contact centre domain presents clearer barriers to entry than DDOG's horizontal observability market, given higher switching costs associated with customer-facing systems. Compared to Datadog's uncertain AI monetization pathways and commoditizing monitoring capabilities facing pressure from hyperscaler-native tools, FIVN delivers measurable cost savings through customer service automation with clearer return on investment metrics for AI-driven initiatives.
The Zacks Consensus Estimate for FIVN’s fourth-quarter EPS is pegged at 79 cents, unchanged over the past 30 days and indicating 1.3% year over year growth.
Over the past six months, Datadog shares have risen 5.3%, while Five9 has fallen 26.1%. Datadog’s steadier performance reflects investor preference for infrastructure-oriented software, whereas Five9’s pullback appears driven by near-term caution on contact centre demand, potentially overlooking progress in AI-led customer experience automation.
DDOG vs. FIVN Price Performance Over 6-months
Image Source: Zacks Investment Research
DDOG trades at a forward sales multiple of 11.94x, reflecting a premium over FIVN’s 1.23x, which appears conservative given FIVN’s predictable subscription revenues, focused contact centre positioning and clearer AI-driven efficiency outcomes. By contrast, Datadog’s higher multiple suggests much of its usage-led growth potential is already priced in.
DDOG vs. FIVN Valuation
Image Source: Zacks Investment Research
Conclusion
Datadog and Five9 are positioned to benefit from long-term enterprise software and AI adoption trends. However, at current levels, Five9 appears better positioned on a risk-reward basis, supported by its predictable subscription revenues, focused contact centre use case and clearer AI-driven return on investment. Datadog’s premium valuation and usage-linked revenue model suggest that a more attractive entry point may be required to improve upside visibility. Five9 currently carries a Zacks Rank #2 (Buy), while Datadog has a Zacks Rank #3 (Hold).
Image: Bigstock
DDOG vs. FIVN: Which Cloud Software Stock is the Better Buy Now?
Key Takeaways
Datadog (DDOG - Free Report) and Five9 (FIVN - Free Report) are key players in the enterprise cloud software industry, offering solutions that enable businesses to optimize their cloud operations and customer engagement. While Datadog specializes in cloud monitoring and observability, Five9 focuses on cloud-based contact centre infrastructure, with each serving mission-critical functions for digital-first enterprises.
Per Grand View Research, the global enterprise software market is projected to reach $517.26 billion by 2030, witnessing a CAGR of 12.1% from 2025 to 2030. DDOG and FIVN are well-positioned to benefit from this substantial growth opportunity as enterprises accelerate cloud adoption and integrate AI into their operational frameworks. Both companies operate subscription-based SaaS models with recurring revenue streams and embedded AI capabilities designed to support intelligent automation and efficiency gains.
Let us delve deeper to assess which is a better investment now.
The Case for DDOG
Datadog operates as a unified observability and monitoring platform, enabling enterprises to manage cloud infrastructure as enterprises transition from on-premise systems to hybrid and multi-cloud environments. The consumption-based revenue model aligns with customer cloud spending, though this creates variable revenue streams that fluctuate with infrastructure consumption patterns. The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $914.55 million, indicating 23.9% year-over-year growth. While FIVN generates predictable recurring revenues through contact centre seat licensing, Datadog's usage-based approach introduces potential volatility during cloud optimization initiatives or economic uncertainty when enterprises reduce spending.
The platform strategy supports consolidation of multiple monitoring tools into a unified system, with 84% of customers utilizing over two products and 54% deploying over four solutions during the third quarter. DDOG supports over 1,000 integrations across technology vendors and cloud providers. However, the observability market faces intensifying pressure from hyperscaler-native monitoring tools offered by Amazon Web Services, Microsoft Azure and Google Cloud Platform, which are often bundled at lower costs within broader enterprise agreements. Open-source alternatives and established competitors create additional pricing pressures as core monitoring capabilities increasingly commoditize.
Datadog has embedded AI capabilities, including automated incident resolution, though monetisation pathways remain uncertain. The expansion into adjacent markets, such as security and digital experience monitoring, creates execution risk against specialised vendors with deeper domain expertise. Compared to FIVN's focused contact centre approach delivering measurable cost savings, DDOG's broader positioning across engineering and operations functions faces longer sales cycles and more complex value proposition articulation across diffused buying centers.
The Zacks Consensus Estimate for DDOG’s fourth-quarter EPS is pegged at 55 cents, up by a penny over the past 30 days and indicating 12.24% year over year growth.
Datadog, Inc. Price and Consensus
Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote
The Case for FIVN
Five9 operates as a cloud-based contact centre platform enabling enterprises to manage customer interactions across voice and digital channels, positioning the company to capitalize on the ongoing shift toward AI-driven customer experience transformation. The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $297.7 million, indicating 6.83% year-over-year growth. The subscription-based revenue model creates predictable recurring cash flows as enterprises commit to multi-year contracts for mission-critical customer communication infrastructure.
The platform approach delivers a competitive advantage by orchestrating interactions across both AI agents and human agents within a unified system. The contact center holds the full conversation history across every channel, enabling hyper-personalization and relationship-based experiences that isolated AI point solutions cannot replicate. While Datadog monitors infrastructure telemetry data across distributed systems, Five9's customer interaction data creates direct business impact through improved customer satisfaction and revenue generation, making the value proposition more immediately tangible to enterprise stakeholders. This data advantage creates a powerful flywheel effect where every engagement enriches subsequent interactions, strengthening performance and personalisation over time.
Strategic partnerships represent a significant growth catalyst, with the ServiceNow relationship reaching a major milestone with the launch of Five9 Fusion for ServiceNow.The partnership ecosystem extends to Salesforce and Google Cloud, expanding market reach through established enterprise relationships. Five9's focused contact centre domain presents clearer barriers to entry than DDOG's horizontal observability market, given higher switching costs associated with customer-facing systems. Compared to Datadog's uncertain AI monetization pathways and commoditizing monitoring capabilities facing pressure from hyperscaler-native tools, FIVN delivers measurable cost savings through customer service automation with clearer return on investment metrics for AI-driven initiatives.
The Zacks Consensus Estimate for FIVN’s fourth-quarter EPS is pegged at 79 cents, unchanged over the past 30 days and indicating 1.3% year over year growth.
Five9, Inc. Price and Consensus
Five9, Inc. price-consensus-chart | Five9, Inc. Quote
Price Performance and Valuation of DDOG and FIVN
Over the past six months, Datadog shares have risen 5.3%, while Five9 has fallen 26.1%. Datadog’s steadier performance reflects investor preference for infrastructure-oriented software, whereas Five9’s pullback appears driven by near-term caution on contact centre demand, potentially overlooking progress in AI-led customer experience automation.
DDOG vs. FIVN Price Performance Over 6-months
Image Source: Zacks Investment Research
DDOG trades at a forward sales multiple of 11.94x, reflecting a premium over FIVN’s 1.23x, which appears conservative given FIVN’s predictable subscription revenues, focused contact centre positioning and clearer AI-driven efficiency outcomes. By contrast, Datadog’s higher multiple suggests much of its usage-led growth potential is already priced in.
DDOG vs. FIVN Valuation
Image Source: Zacks Investment Research
Conclusion
Datadog and Five9 are positioned to benefit from long-term enterprise software and AI adoption trends. However, at current levels, Five9 appears better positioned on a risk-reward basis, supported by its predictable subscription revenues, focused contact centre use case and clearer AI-driven return on investment. Datadog’s premium valuation and usage-linked revenue model suggest that a more attractive entry point may be required to improve upside visibility. Five9 currently carries a Zacks Rank #2 (Buy), while Datadog has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.