Why Snowflake, Datadog, and MongoDB Plunged Today
Shares of high-growth enterprise software stocks Snowflake (NYSE: SNOW), Datadog (NASDAQ: DDOG), and MongoDB (NASDAQ: MDB) were falling hard again today -- down 2.9%, 2.7%, and 2.7%, respectively, as of 12:48 p.m. ET -- even as the broader market was up. They were down much more to start the day, before the market roared back into the green on what looks like a short-covering rally.
The relative underperformance can be attributed to, like most things these days, inflation and interest rates. This morning, the Consumer Price Index (CPI) report for September came in hotter than expected for the second month in a row, putting upward pressure on interest rates and pushing down the valuations of high-growth, more expensive software stocks.
In addition, one Wall Street analyst conducted a survey of IT professionals concluding that demand for software investment would weaken in the year ahead.
Source Fool.com
