Datadog Inc (NASDAQ:DDOG) shares are rising in Wednesday’s after-hours session following strong earnings from Snowflake Inc (NYSE:SNOW).

• Datadog stock is moving higher. Why are DDOG shares rallying?

Snowflake’s Strong Results Drive AI Data Cloud Optimism

Snowflake on Wednesday reported a double beat for the second quarter, reporting revenue of $1.55 billion versus estimates of $1.48 billion and adjusted earnings per share of 62 cents versus estimates of 45 cents.

The company is benefiting from the enterprise AI revolution with product revenue up 37% year-over-year and remaining performance obligations of $9 billion, up 30% year-over-year.

“AI continues to compound our advantages, creating a flywheel effect across the business,” CEO Sridhar Ramaswamy said.

Snowflake stock soared more than 22% following the report, pulling Datadog up with it. Datadog offers an AI-powered observability and security platform, and often moves in sympathy with Snowflake.

Datadog reported its own second-quarter results last month, beating estimates on the top and bottom lines as AI drove strong demand. The company also raised its full-year guidance on the back of continued AI momentum.

Datadog Shares Pop After Hours

DDOG Price Action: Datadog stock was up 4.80% in extended trading Wednesday, trading at $219.27 at the time of publication, according to Benzinga Pro.

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