Microsoft (NASDAQ:MSFT – Get Free Report) and Datadog (NASDAQ:DDOG – Get Free Report) are both large-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
Insider and Institutional Ownership
71.1% of Microsoft shares are owned by institutional investors. Comparatively, 78.3% of Datadog shares are owned by institutional investors. 0.0% of Microsoft shares are owned by company insiders. Comparatively, 6.5% of Datadog shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of current recommendations and price targets for Microsoft and Datadog, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Microsoft | 0 | 5 | 42 | 0 | 2.89 |
| Datadog | 1 | 5 | 38 | 1 | 2.87 |
Profitability
This table compares Microsoft and Datadog’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Microsoft | 40.31% | 31.98% | 18.70% |
| Datadog | 4.48% | 5.67% | 3.24% |
Earnings & Valuation
This table compares Microsoft and Datadog”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Microsoft | $331.84 billion | 11.04 | $133.75 billion | $17.96 | 27.47 |
| Datadog | $3.43 billion | 22.01 | $107.74 million | $0.49 | 428.76 |
Microsoft has higher revenue and earnings than Datadog. Microsoft is trading at a lower price-to-earnings ratio than Datadog, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Microsoft has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Datadog has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.
Summary
Microsoft beats Datadog on 8 of the 15 factors compared between the two stocks.
About Microsoft
Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.
About Datadog
Datadog, Inc. operates an observability and security platform for cloud applications in North America and internationally. The company's products comprise infrastructure and application performance monitoring, log management, digital experience monitoring, continuous profiler, database monitoring, data streams and universal service monitoring, network monitoring, incident management, workflow automation, observability pipelines, cloud cost and cloud security management, application security management, cloud SIEM, sensitive data scanner, and CI visibility. Datadog, Inc. was incorporated in 2010 and is headquartered in New York, New York.
Receive News & Ratings for Microsoft Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Microsoft and related companies with MarketBeat.com's FREE daily email newsletter.
