Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Written in the first person by Warren Buffett and Charlie Munger, applying our own standards. We arrived at every conclusion independently from the company's filings, earnings calls, and current market data. Datadog is a genuinely well-run software company with the best operating metrics we have seen in its category: 80% gross margins, a customer base that spends 20%+ more with the company every year, $4 billion of net cash, and founders still at the wheel sixteen years in. We want to say that plainly at the outset, because what follows is a two-star rating, and we don't want anyone to mistake our discipline for contempt. The rating rests on two conclusions. First, the moat, while real today, does not meet our standard of durable — the kind we can confidently project across decades rather than product cycles.
Recent filings analysed: 8-K (2026-08-06), 10-Q (2026-08-06), 8-K (2026-06-16), 8-K (2026-05-07).
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