Shares of Datadog jumped 14.5% to $130.56 on Tuesday after the cloud monitoring company reported quarterly results that exceeded analyst expectations. The company cited significant demand linked to artificial intelligence workloads as a key growth driver.
Big Tech Turns to Debt Markets
Alphabet announced the sale of $20 billion in bonds to help finance its expanding AI infrastructure requirements. This move represents a notable shift for major technology firms, which have traditionally relied more heavily on cash reserves. Reports suggest the offering might include a rare 100-year bond issuance.
Cisco Systems advanced 1.5% after unveiling a new data center chip designed specifically for AI clusters. The company stated the chip, manufactured using TSMC's 3-nanometer process, could accelerate certain AI tasks by up to 28%. Meanwhile, Cadence Design Systems rose 2.4% following the introduction of an AI-powered tool aimed at automating chip design processes.
Market Movements and Concerns
Major stock indexes opened slightly higher, continuing a technology-led recovery. The Dow Jones Industrial Average edged up 0.11%, while the S&P 500 and Nasdaq Composite each gained 0.14% at the open.
Not all AI-related news was positive. Micron Technology fell 2.3% amid investor concerns about intensifying competition in the high-bandwidth memory market, a critical component for advanced AI processors. Policy considerations also lingered, with reports suggesting potential exemptions from certain chip tariffs for major cloud providers.
The broader narrative highlights a pivotal moment for the AI investment theme. While companies demonstrating tangible AI adoption are being rewarded, the sector faces a multi-year, capital-intensive buildout phase funded increasingly by debt. Competition is escalating across semiconductors, networking, and memory, keeping investor sensitivity high to any shifts in guidance or customer demand.
Investors are now looking ahead to upcoming earnings reports from Cisco and, crucially, Nvidia later this month, which will serve as a key barometer for AI server demand and the health of the supporting supply chain.
