Software stocks, including Datadog Inc. (DDOG) and Snowflake Inc. (SNOW), experienced a surge in after-hours trading following Inc.'s (AMZN) positive remarks about its AWS cloud-computing business during its latest earnings announcement. With AWS managing to achieve a 12% growth, Chief Executive Andy Jassy highlighted in the earnings release that this crucial aspect of the business had "stabilized as customers started shifting from cost optimization to new workload deployment."

This announcement by Amazon is seen as a positive indicator for Datadog's own performance, leading to a nearly 7% increase in Datadog shares after the market closed. Bernstein analyst Peter Weed previously emphasized the close connection between Datadog and AWS growth performance back in May. Datadog will be reporting its own results on Aug. 8.

The extended trading session also saw Snowflake's shares rally significantly, rising by about 6%. Both Datadog and Snowflake had experienced a dip in their stock prices following Microsoft Corp.'s (MSFT) earnings report last week, which was perceived as having a more cautious tone.

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