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CrowdStrike & Datadog: Potential 'Monster Stocks' in Cybersecurity & Cloud Monitoring

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  Published in Stocks and Investing on Wednesday, February 25th 2026 at 13:25 GMT by The Motley Fool
      Locales: California, Texas, Washington, UNITED STATES

Wednesday, February 25th, 2026 - In an increasingly digitized world, the demand for robust cybersecurity and comprehensive cloud monitoring solutions is not merely growing - it's exploding. Two companies consistently highlighted by analysts as potential "monster stocks" are CrowdStrike (CRWD) and Datadog (DDOG). But what's driving this optimism, and why are these firms uniquely positioned to capitalize on the evolving technological landscape? This article delves into the core strengths of both companies, examines their recent performance, and extrapolates potential future growth trajectories.

The Unceasing Demand for Cybersecurity: CrowdStrike's Ascendancy

The threat landscape continues to evolve at an alarming rate. From ransomware attacks targeting critical infrastructure to sophisticated phishing schemes designed to steal sensitive data, businesses face a constant barrage of cyber threats. This creates an unrelenting need for proactive and effective cybersecurity solutions. CrowdStrike has established itself as a leader in this space, not simply by providing security products, but by delivering a comprehensive platform.

CrowdStrike's Falcon platform utilizes a cloud-native, AI-powered approach to endpoint protection, threat intelligence, and incident response. This isn't just about detecting malware; it's about proactively preventing breaches, rapidly containing threats when they occur, and providing actionable insights to security teams. The company's shift towards a subscription-based model has proven incredibly successful, providing predictable recurring revenue and fostering strong customer relationships.

Looking ahead, CrowdStrike is expanding its offerings beyond traditional endpoint security. Recent acquisitions, notably those focused on identity threat detection and extended detection and response (XDR), demonstrate a commitment to building a more holistic security ecosystem. This strategic diversification allows CrowdStrike to address a wider range of security challenges and increase its addressable market. Financial performance has consistently exceeded expectations, with robust revenue growth and improving profit margins. While the premium valuation remains a concern for some, the continued demand for cybersecurity services and CrowdStrike's dominant market position largely justify the price.

Navigating the Cloud Complexity: Datadog's Crucial Role

The migration to the cloud has unlocked tremendous opportunities for businesses, but it has also introduced new complexities. Managing and monitoring increasingly distributed cloud infrastructure requires sophisticated tools that can provide real-time visibility into performance, security, and compliance. This is where Datadog shines.

Datadog's unified monitoring and analytics platform integrates seamlessly with a vast array of cloud providers (AWS, Azure, Google Cloud) and on-premise systems. This allows businesses to break down silos, gain a holistic view of their entire IT environment, and proactively identify and resolve issues before they impact users. Datadog's strengths lie not only in its monitoring capabilities but also in its robust analytics and visualization tools, which empower teams to optimize performance, reduce costs, and accelerate innovation.

Over the past few years, Datadog has aggressively expanded its platform beyond core infrastructure monitoring to include application performance monitoring (APM), log management, security monitoring, and synthetic monitoring. This expansion demonstrates a clear understanding of the evolving needs of cloud-native organizations. The company's focus on ease of use and integration has also been a key differentiator, making it a favorite among DevOps and SRE teams. Like CrowdStrike, Datadog boasts impressive revenue growth and positive earnings, despite a high valuation. The ongoing cloud adoption trend and Datadog's comprehensive platform position it for continued success.

The Long-Term Thesis: Why Hold These Stocks?

Both CrowdStrike and Datadog operate in markets characterized by strong secular tailwinds. Cybersecurity is no longer an optional expense; it's a business imperative. Cloud adoption is not a trend; it's the new normal. These companies are not just benefiting from these trends; they are actively shaping them.

While short-term market fluctuations are inevitable, the long-term outlook for both stocks remains exceptionally positive. Their strong track records of innovation, consistent financial performance, and leadership positions in their respective markets suggest that they have the potential to deliver substantial returns for investors over the next decade and beyond. The relatively high valuations reflect investor confidence in their growth prospects, but a continued focus on execution and market expansion will be crucial to justifying those premiums. For investors seeking exposure to the rapidly growing cybersecurity and cloud monitoring markets, CrowdStrike and Datadog represent compelling long-term opportunities.