2 Cloud Stocks to Target as Tech Rallies

Both equities tend to outperform volatility expectations

Deputy Editor
Apr 12, 2022 at 12:56 PM
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The 10-year Treasury yield took a step back today, after nabbing three-year highs in the previous session. In addition, today's reading of the March consumer price index (CPI) injected optimism on Wall Street that inflation is nearing its peak. Both of these events have investors excited about high-flying tech stocks, and Datadog Inc (NASDAQ:DDOG) and Cloudflare Inc (NYSE:NET) are two such names that are popping in response to that optimism. 

Datadog stock was last seen 4.5% higher to trade at $141.13. After pulling back from its November peaks near the $200 level, DDOG suffered two closes below the 320-day moving average last month -- an occurrence the equity has managed to avoid since May 2021. And though the recent volatility in the bond market has the shares more than 20% below their year-to-date breakeven level, Datadog stock still sports a 56.2% year-over-year lead.

Meanwhile, Cloudflare stock is up 5.6%, trading at $116 at last check. NET's chart performance is similar to DDOG's, with a November peak followed by a steep drop to the $80 level. Today, familiar pressure at the $120 mark is keeping a cap on gains. Year-over-year, Cloudflare stock boasts a 68.4% lead. 

It's also worth noting that DDOG's Schaeffer's Volatility Scorecard (SVS) ranks at an 89 out of a possible 100, while NET's ranks at a 93. This means both stocks tend to outperform volatility expectations.  


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