Let’s dig into the relative performance of Twilio (NYSE: TWLO) and its peers as we unravel the now-completed Q1 software development earnings season.

As legendary VC investor Marc Andreessen says, "Software is eating the world", and it touches virtually every industry. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming.

The 12 software development stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.9% while next quarter’s revenue guidance was 1.4% above.

Luckily, software development stocks have performed well with share prices up 36.3% on average since the latest earnings results.

Twilio (NYSE: TWLO)

Known for the clever "Twilio Magic" demo that had developers creating functioning communications apps in minutes, Twilio (NYSE: TWLO) provides a platform that enables businesses to communicate with their customers through voice, messaging, email, and other digital channels.

Twilio reported revenues of $1.41 billion, up 20% year on year. This print exceeded analysts’ expectations by 4.7%. Overall, it was a very strong quarter for the company with a significant improvement in its net revenue retention rate and an impressive beat of analysts’ billings estimates.

Interestingly, the stock is up 36.5% since reporting and currently trades at $202.06.

Is now the time to buy Twilio? Access our full analysis of the earnings results here, it’s free.

Best Q1: Datadog (NASDAQ: DDOG)

Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.

Datadog reported revenues of $1.01 billion, up 32.2% year on year, outperforming analysts’ expectations by 4.9%. The business had an exceptional quarter with a solid beat of analysts’ annual recurring revenue and billings estimates.

Datadog achieved the biggest analyst estimate beat, highest guidance raise, and highest full-year guidance raise among its peers. The company added 240 enterprise customers paying more than $100,000 annually to reach a total of 4,550. The market seems happy with the results as the stock is up 83.1% since reporting. It currently trades at $263.08.

Is now the time to buy Datadog? Access our full analysis of the earnings results here, it’s free.

Slowest Q1: Akamai (NASDAQ: AKAM)

With a massive distributed network spanning 4,100+ points of presence in nearly 130 countries, Akamai Technologies (NASDAQ: AKAM) provides a global distributed cloud platform that helps businesses deliver, secure, and optimize their digital experiences online.

Akamai reported revenues of $1.07 billion, up 5.8% year on year, in line with analysts’ expectations. It was a softer quarter as it posted EPS guidance for next quarter missing analysts’ expectations and full-year EPS guidance slightly missing analysts’ expectations.

Akamai delivered the weakest performance against analyst estimates and weakest guidance update of the whole group. Interestingly, the stock is up 1.9% since the results and currently trades at $118.89.

Read our full analysis of Akamai’s results here.

Fastly (NASDAQ: FSLY)

Taking its name from the core advantage it delivers to customers, Fastly (NASDAQ: FSLY) operates an edge cloud platform that processes, secures, and delivers web content as close to end users as possible, enabling faster digital experiences.

Fastly reported revenues of $173 million, up 19.8% year on year. This number surpassed analysts’ expectations by 0.6%. Overall, it was a strong quarter as it also put up EPS guidance for next quarter exceeding analysts’ expectations and full-year EPS guidance exceeding analysts’ expectations.

The stock is down 36.4% since reporting and currently trades at $20.07.

Read our full, actionable report on Fastly here, it’s free.

Cloudflare (NYSE: NET)

With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE: NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.

Cloudflare reported revenues of $639.8 million, up 33.5% year on year. This result beat analysts’ expectations by 3%. It was a very strong quarter as it also recorded an impressive beat of analysts’ billings estimates and full-year EPS guidance exceeding analysts’ expectations.

Cloudflare delivered the fastest revenue growth in the group. The stock is up 5.9% since reporting and currently trades at $271.90.

Read our full, actionable report on Cloudflare here, it’s free.

Market Update

Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.

Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.

By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.