Alphabet Recovering While Datadog Slows - Diversification and Profitability Give Edge to Google Parent

Alphabet's advertising business is recovering after a slowdown in 2022, while Datadog's growth is slowing.

Alphabet faces competitive and regulatory threats, but is profitable and reasonably valued. Datadog is unprofitable by GAAP measures and has a high valuation.

Alphabet is diversified across ads, cloud, AI, and other businesses. Datadog relies solely on its observability software.

Datadog had explosive growth since its 2019 IPO but is now forecasting a growth slowdown.

Despite some challenges, Alphabet looks better positioned than Datadog given valuation, profitability, and business diversification.