DigitalOcean (DOCN)
Market Price (8/21/2026): $114.54 | Market Cap: $12.0 BilSector: Information Technology | Industry: Internet Services & Infrastructure
DigitalOcean (DOCN)
Market Price (8/21/2026): $114.54Market Cap: $12.0 BilSector: Information TechnologyIndustry: Internet Services & Infrastructure
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 31% Megatrend and thematic driversMegatrends include Cloud Computing. Themes include Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). | Stock price has recently run up significantly12M Rtn12 month market price return is 279% Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is -2.5% Key risksDOCN key risks include [1] intense competition from hyperscale cloud providers threatening its market share and [2] scrutiny over its specific financial health, Show more. |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 31% |
| Megatrend and thematic driversMegatrends include Cloud Computing. Themes include Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). |
| Stock price has recently run up significantly12M Rtn12 month market price return is 279% |
| Yield minus risk free rate is negativeERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is -2.5% |
| Key risksDOCN key risks include [1] intense competition from hyperscale cloud providers threatening its market share and [2] scrutiny over its specific financial health, Show more. |
Qualitative Assessment
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DigitalOcean (DOCN) stock has gained about 20% since 4/30/2026 because of the following key factors:
1. Strong Fiscal Q2 2026 Financial Performance and Upbeat Outlook.
DigitalOcean reported adjusted earnings per share (EPS) of $0.45 for fiscal Q2 2026 (ended June 30, 2026), significantly exceeding analysts' consensus estimates, which ranged from $0.22 to $0.26, by over 70% to 100%. Revenue for the quarter also surpassed expectations, reaching $281.18 million with a 29% year-over-year increase. This robust financial performance was accompanied by raised full-year 2026 revenue guidance to approximately $1.17 billion to $1.18 billion, representing 30-31% growth, and increased confidence in achieving over 50% revenue growth for fiscal year 2027.
2. Accelerated Growth in AI-Native Cloud Offerings and Large Customers.
The company demonstrated substantial growth in its AI-related services, with AI customer Annual Recurring Revenue (ARR) surging 212% year-over-year to $234 million in fiscal Q2 2026. This was further supported by a 214% year-over-year increase in ARR from customers spending at least $1 million, reaching $259 million. DigitalOcean's strategic shift to an "AI-Native Cloud," purpose-built for inference and agentic workloads, launched in April 2026, along with the introduction of Managed AI Agents in August 2026, capitalized on the increasing demand for specialized AI infrastructure. The addition of a record $93 million in incremental ARR and a 12x increase in Remaining Performance Obligation (RPO) to $894 million underscored strong demand and a robust pipeline for the company's expanding capacity.
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DigitalOcean (DOCN) stock has gained about 20% since 4/30/2026 because of the following key factors:
1. Strong Fiscal Q2 2026 Financial Performance and Upbeat Outlook.
DigitalOcean reported adjusted earnings per share (EPS) of $0.45 for fiscal Q2 2026 (ended June 30, 2026), significantly exceeding analysts' consensus estimates, which ranged from $0.22 to $0.26, by over 70% to 100%. Revenue for the quarter also surpassed expectations, reaching $281.18 million with a 29% year-over-year increase. This robust financial performance was accompanied by raised full-year 2026 revenue guidance to approximately $1.17 billion to $1.18 billion, representing 30-31% growth, and increased confidence in achieving over 50% revenue growth for fiscal year 2027.
2. Accelerated Growth in AI-Native Cloud Offerings and Large Customers.
The company demonstrated substantial growth in its AI-related services, with AI customer Annual Recurring Revenue (ARR) surging 212% year-over-year to $234 million in fiscal Q2 2026. This was further supported by a 214% year-over-year increase in ARR from customers spending at least $1 million, reaching $259 million. DigitalOcean's strategic shift to an "AI-Native Cloud," purpose-built for inference and agentic workloads, launched in April 2026, along with the introduction of Managed AI Agents in August 2026, capitalized on the increasing demand for specialized AI infrastructure. The addition of a record $93 million in incremental ARR and a 12x increase in Remaining Performance Obligation (RPO) to $894 million underscored strong demand and a robust pipeline for the company's expanding capacity.
3. Positive Analyst Upgrades and Price Target Revisions.
Several investment firms issued favorable reports on DigitalOcean, upgrading its stock ratings and increasing price targets throughout the period. For example, Stifel Nicolaus raised its rating from "hold" to "buy" and increased its price target from $135.00 to $160.00 in July 2026. Similarly, KeyCorp initiated coverage with an "overweight" rating and a $200.00 price target in June 2026. These and other positive revisions contributed to a consensus "Buy" rating among analysts, with an average price target ranging from $151.33 to $174.1, reflecting growing confidence in DigitalOcean's market position and future performance.
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Stock Movement Drivers
Fundamental Drivers
The 18.6% change in DOCN stock from 4/30/2026 to 8/20/2026 was primarily driven by a 49.2% change in the company's P/E Multiple.| (LTM values as of) | 4302026 | 8202026 | Change |
|---|---|---|---|
| Stock Price ($) | 96.43 | 114.35 | 18.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 901 | 1,011 | 12.2% |
| Net Income Margin (%) | 28.8% | 23.3% | -19.1% |
| P/E Multiple | 34.1 | 50.9 | 49.2% |
| Shares Outstanding (Mil) | 92 | 105 | -12.4% |
| Cumulative Contribution | 18.6% |
Market Drivers
4/30/2026 to 8/20/2026| Return | Correlation | |
|---|---|---|
| DOCN | 18.6% | |
| Market (SPY) | 6.1% | 41.7% |
| Sector (XLK) | 14.8% | 54.6% |
Fundamental Drivers
The 107.0% change in DOCN stock from 1/31/2026 to 8/20/2026 was primarily driven by a 154.2% change in the company's P/E Multiple.| (LTM values as of) | 1312026 | 8202026 | Change |
|---|---|---|---|
| Stock Price ($) | 55.25 | 114.35 | 107.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 864 | 1,011 | 17.0% |
| Net Income Margin (%) | 29.2% | 23.3% | -20.2% |
| P/E Multiple | 20.0 | 50.9 | 154.2% |
| Shares Outstanding (Mil) | 91 | 105 | -12.8% |
| Cumulative Contribution | 107.0% |
Market Drivers
1/31/2026 to 8/20/2026| Return | Correlation | |
|---|---|---|
| DOCN | 107.0% | |
| Market (SPY) | 10.5% | 34.4% |
| Sector (XLK) | 27.4% | 48.9% |
Fundamental Drivers
The 310.4% change in DOCN stock from 7/31/2025 to 8/20/2026 was primarily driven by a 115.4% change in the company's P/E Multiple.| (LTM values as of) | 7312025 | 8202026 | Change |
|---|---|---|---|
| Stock Price ($) | 27.86 | 114.35 | 310.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 807 | 1,011 | 25.4% |
| Net Income Margin (%) | 13.5% | 23.3% | 72.9% |
| P/E Multiple | 23.6 | 50.9 | 115.4% |
| Shares Outstanding (Mil) | 92 | 105 | -12.1% |
| Cumulative Contribution | 310.4% |
Market Drivers
7/31/2025 to 8/20/2026| Return | Correlation | |
|---|---|---|
| DOCN | 310.4% | |
| Market (SPY) | 21.7% | 36.4% |
| Sector (XLK) | 39.9% | 46.5% |
Fundamental Drivers
The 130.9% change in DOCN stock from 7/31/2023 to 8/20/2026 was primarily driven by a 64.6% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 7312023 | 8202026 | Change |
|---|---|---|---|
| Stock Price ($) | 49.52 | 114.35 | 130.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 614 | 1,011 | 64.6% |
| P/S Multiple | 7.7 | 11.8 | 53.5% |
| Shares Outstanding (Mil) | 96 | 105 | -8.6% |
| Cumulative Contribution | 130.9% |
Market Drivers
7/31/2023 to 8/20/2026| Return | Correlation | |
|---|---|---|
| DOCN | 130.9% | |
| Market (SPY) | 72.5% | 47.1% |
| Sector (XLK) | 109.2% | 49.9% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| DOCN Return | 89% | -68% | 44% | -7% | 41% | 142% | 174% |
| Peers Return | 34% | -30% | 54% | 27% | 19% | 6% | 131% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 13% | 105% |
Monthly Win Rates [3] | |||||||
| DOCN Win Rate | 60% | 25% | 67% | 42% | 67% | 75% | |
| Peers Win Rate | 68% | 28% | 70% | 60% | 50% | 45% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| DOCN Max Drawdown | - | -71% | -60% | -33% | -45% | -41% | |
| Peers Max Drawdown | -14% | -40% | -19% | -21% | -32% | -31% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: AMZN, MSFT, GOOGL, AKAM, ORCL.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 8/20/2026 (YTD)
How Low Can It Go
| Event | DOCN | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -41.5% | -18.8% |
| % Gain to Breakeven | 70.9% | 23.1% |
| Time to Breakeven | 211 days | 79 days |
| 2024 Yen Carry Trade Unwind | ||
| % Loss | -13.0% | -7.8% |
| % Gain to Breakeven | 15.0% | 8.5% |
| Time to Breakeven | 4 days | 18 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -59.3% | -9.5% |
| % Gain to Breakeven | 145.9% | 10.5% |
| Time to Breakeven | 737 days | 24 days |
| 2022 Inflation Shock & Fed Tightening | ||
| % Loss | -59.0% | -24.5% |
| % Gain to Breakeven | 144.0% | 32.4% |
| Time to Breakeven | 1406 days | 427 days |
In The Past
DigitalOcean's stock fell -41.5% during the 2025 US Tariff Shock. Such a loss loss requires a 70.9% gain to breakeven.
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Asset Allocation
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| Event | DOCN | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -41.5% | -18.8% |
| % Gain to Breakeven | 70.9% | 23.1% |
| Time to Breakeven | 211 days | 79 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -59.3% | -9.5% |
| % Gain to Breakeven | 145.9% | 10.5% |
| Time to Breakeven | 737 days | 24 days |
| 2022 Inflation Shock & Fed Tightening | ||
| % Loss | -59.0% | -24.5% |
| % Gain to Breakeven | 144.0% | 32.4% |
| Time to Breakeven | 1406 days | 427 days |
In The Past
DigitalOcean's stock fell -41.5% during the 2025 US Tariff Shock. Such a loss loss requires a 70.9% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About DigitalOcean (DOCN)
DigitalOcean Holdings, Inc. operates a global cloud computing platform designed to provide on-demand infrastructure and platform tools. Essentially, it offers the foundational digital resources necessary for building, deploying, and scaling internet-based applications and services. Its core offerings include infrastructure solutions such as virtual servers (compute), storage, and networking capabilities.
Beyond basic infrastructure, DigitalOcean extends its services to include fully managed application, container, and database offerings. These managed services simplify complex IT operations, allowing users to easily deploy and scale their applications without needing to manage the underlying server infrastructure. The company's primary customers are developers, start-ups, and small to medium-sized businesses (SMBs) who seek accessible, scalable, and developer-friendly cloud solutions.
Customers utilize DigitalOcean's platform for a diverse range of use cases, including hosting web and mobile applications, e-commerce sites, media and gaming platforms, and various personal web projects. Its services are delivered internationally across North America, Europe, Asia, and other regions, catering to a broad user base comprising software engineers, researchers, data scientists, system administrators, and students.
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The AWS or Google Cloud for individual developers and small businesses.
A simplified and more affordable AWS or Google Cloud, built for developers and small teams.
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- Compute Infrastructure: Provides on-demand virtual servers and computing resources for running applications and workloads.
- Storage Infrastructure: Offers various storage solutions for data persistence, including block storage and object storage.
- Networking Infrastructure: Enables secure and scalable connectivity, traffic management, and private networking for cloud resources.
- Managed Application Offerings: Delivers fully managed services for deploying, running, and scaling web and mobile applications.
- Managed Container Offerings: Provides managed services for deploying and orchestrating containerized applications.
- Managed Database Offerings: Offers fully managed database services for popular database engines, handling operational complexities.
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DigitalOcean (DOCN) primarily serves a broad base of developers, start-ups, and small to medium-sized businesses (SMBs) through its self-service cloud computing platform. Due to the fragmented nature of its customer base and its business model as a cloud infrastructure provider, DigitalOcean does not typically have a few large, identifiable "major customers" that are public companies. Instead, its customer base can be categorized as follows:
- Developers and IT Professionals: This category includes software engineers, researchers, data scientists, and system administrators who utilize DigitalOcean's platform for building, deploying, and managing web and mobile applications, websites, and other digital infrastructure.
- Start-ups and Small to Medium-Sized Businesses (SMBs): Businesses of various sizes, particularly those in their early stages or with smaller IT budgets, leverage DigitalOcean for their core operations, including website hosting, e-commerce platforms, media and gaming applications, and managed services.
- Individuals (Students and Hobbyists): The platform also caters to individual users, such as students learning about cloud computing or hobbyists working on personal web projects and experimental applications.
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- Equinix, Inc. (EQIX)
- Digital Realty Trust, Inc. (DLR)
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Paddy Srinivasan, Chief Executive Officer
Paddy Srinivasan was appointed Chief Executive Officer of DigitalOcean in February 2024. He brings over 25 years of experience in technology leadership to the role. Before joining DigitalOcean, Srinivasan served as CEO at GoTo (formerly LogMeIn), a SaaS company providing cloud communication and IT management software. His career includes leadership positions at major technology companies such as Microsoft, Amazon (where he was General Manager for Data, Machine Learning Platform Services, Alexa AI), and Oracle. He also co-founded Opstera, a cloud monitoring and managed service provider, which was subsequently acquired by Avanade (a Microsoft-Accenture company).
Matt Steinfort, Chief Financial Officer
Matt Steinfort became DigitalOcean's Chief Financial Officer in January 2023. Prior to this role, he was the Chief Financial Officer at Zayo, a global communications infrastructure platform. Steinfort also founded Envysion, a video intelligence SaaS company, where he held the positions of President and CEO. His professional background includes leadership roles at ICG Communications, Level 3 Communications, Bain & Company, and Cambridge Technology Partners.
Vinay Kumar, Chief Product and Technology Officer
Vinay Kumar serves as the Chief Product and Technology Officer at DigitalOcean.
Cynthia Carpenter, Senior Vice President, People
Cynthia Carpenter holds the position of Senior Vice President, People at DigitalOcean.
Larry D'Angelo, Chief Revenue Officer
Larry D'Angelo is the Chief Revenue Officer for DigitalOcean.
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- Intense Competition and Hyperscaler Expansion: DigitalOcean operates in a highly competitive cloud computing market, facing formidable rivals such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, as well as numerous smaller cloud providers. A significant risk is that these larger "hyperscale" cloud providers, with their vast resources and economies of scale, could more aggressively target the small and medium-sized business (SMB) segment, which is DigitalOcean's primary customer base. This heightened competition could lead to price wars, reduced market share, and pressure on DigitalOcean's pricing power and profitability.
- Customer Churn and Low Net Revenue Retention: DigitalOcean faces challenges with customer retention, as indicated by its net revenue retention rate. A low net revenue retention rate suggests that existing customers are not increasing their spending with the company over time, or that a notable portion of customers are leaving. This necessitates a continuous effort to acquire new customers to drive revenue growth, which can be more costly and less sustainable than growing revenue from existing clients.
- Debt Structure and Financial Fluctuations: The company is exposed to risks related to its financial structure, including approximately $1.5 billion in convertible notes, with a significant maturity in 2026. This debt represents a potential financial risk, as settling it through the issuance of new shares at current market prices could result in substantial shareholder dilution. Additionally, DigitalOcean faces challenges with fluctuations in financial results, making it difficult to project future outcomes and potentially leading to stock price volatility if expectations are not met.
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The clear emerging threat for DigitalOcean is the rise of highly specialized, developer-centric platforms that offer an even higher level of abstraction and opinionated workflows for specific application types (e.g., web applications, APIs, static sites). Companies like Vercel, Netlify, Render, and Railway are gaining significant traction by providing streamlined, often Git-driven deployment experiences that abstract away much of the infrastructure management, appealing directly to DigitalOcean's core customer base of developers, startups, and small to medium-sized businesses who prioritize simplicity and rapid deployment for specific workloads. These platforms represent a shift in how certain applications are built and deployed, potentially drawing developers away from more generalized cloud offerings.
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DigitalOcean (DOCN) is expected to drive future revenue growth over the next 2-3 years through several key strategies:
-
Focus on Digital Native Enterprises (DNEs) and Scaling Larger Customers: DigitalOcean is increasingly concentrating its efforts on attracting and expanding relationships with larger Digital Native Enterprises and customers generating higher Annual Recurring Revenue (ARR). The company reported significant growth in its million-dollar customers, with a 123% year-over-year increase in ARR for this cohort in Q4 2025. This focus on scaling with larger, high-growth customers is a key driver as these accounts are accelerating faster than the broader market.
-
Expansion into AI/ML Workloads and Inference Cloud Services: DigitalOcean is strategically positioning itself as a platform for AI and cloud-native companies, particularly for production AI workloads. The company's AI customer ARR grew 150% year-over-year in Q4 2025, constituting 12% of total ARR. A substantial portion (70%) of this AI revenue comes from inference services or general cloud, rather than bare metal GPU rentals, indicating a shift towards higher-value offerings. DigitalOcean is investing in GPU capacity and an inference cloud capability to capture this growing market segment.
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Increased Data Center Capacity: To support its anticipated growth, DigitalOcean plans to bring 31 megawatts of new data center capacity online in 2026. This significant infrastructure expansion, with facilities ramping throughout the year, is projected to enable the company to achieve an exit revenue growth rate above 25% by Q4 2026 and reach 30% growth in 2027.
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Product Innovation and Adoption of Higher-Value Managed Services: Continuous product development and the introduction of new features, such as remote MCP support, agent development kit, GPU observability, managed NFS, and multi-node GPU capabilities, are expected to contribute to revenue growth. Furthermore, the increasing adoption of managed services like Kubernetes and Databases, which saw approximately 20% year-over-year growth in early 2025, enhances customer stickiness and drives up average revenue per user (ARPU).
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Share Repurchases
- DigitalOcean has repurchased 2.4 million shares for $82 million in 2025, at an average price of approximately $35 per share.
- Cumulative share repurchases since its IPO reached $1.6 billion and 34.9 million shares through December 31, 2025.
- The company has a remaining $100 million share buyback authorization that extends through July 31, 2027.
Share Issuance
- In 2025, DigitalOcean recorded $4.355 million in proceeds from the issuance of common stock under its equity incentive plan.
- The company received $4.653 million in proceeds from the issuance of common stock under its employee stock purchase plan in 2025.
- Weighted average fully diluted shares outstanding for full-year 2025 were approximately 106 million to 107 million shares.
Capital Expenditures
- DigitalOcean's total capital expenditures were $266 million in 2025, $186 million in 2024, and $125 million in 2023.
- Capital expenditures for property and equipment were $129.086 million in 2025 and $178.167 million in 2024.
- The primary focus of capital expenditures is on investments in data centers and GPU capacity to accelerate growth, including securing approximately 30 megawatts of incremental data center capacity to support growth in 2026 and beyond.
Peer Outperformance in Internet Services & Infrastructure
| Industry | Names | 1Y med | 3Y med | 5Y med | Top 3 by 5Y |
|---|---|---|---|---|---|
| Electronic Manufacturing Services | 9 | 66.3% | 209.6% | 327.6% | FLEX 749% · TTMI 715% · JBL 439% |
| Semiconductor Materials & Equipment | 27 | 163.5% | 98.4% | 128.2% | AEHR 1803% · AXTI 749% · KLAC 510% |
| Technology Distributors | 9 | 26.9% | 60.7% | 79.8% | CLMB 336% · AVT 149% · SNX 114% |
| Electronic Components | 26 | 65.1% | 59.2% | 59.9% | CLS 3347% · BELFA 1380% · LPTH 604% |
| Communications Equipment | 35 | 39.8% | 76.0% | 44.2% | AAOI 1850% · LITE 940% · FEIM 695% |
| Semiconductors | 54 | 32.8% | 36.1% | 31.8% | POET 1930% · MU 1323% · NVDA 945% |
| Internet Services & Infrastructure ← | 6 | 18.0% | 39.3% | 24.6% | DOCN 115% · GDDY 39% · VRSN 32% |
| Technology Hardware, Storage & Peripherals | 22 | 34.2% | 72.1% | 24.0% | STX 1003% · WDC 950% · SMCI 924% |
| Electronic Equipment & Instruments | 27 | -2.7% | 15.5% | -3.2% | PI 218% · SOTK 133% · NSSC 126% |
| IT Consulting & Other Services | 28 | -24.2% | -6.5% | -19.7% | CHRN 634111% · APLD 2114% · INOD 707% |
| Application Software | 123 | -18.2% | -8.8% | -42.0% | VIDA 127122% · INLX 5401% · PLTR 625% |
| Systems Software | 69 | -8.6% | 17.1% | -50.7% | QNC 930% · PANW 471% · PAYS 444% |
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 201.09 |
| Mkt Cap | 1,604.8 |
| Rev LTM | 199,598 |
| Op Inc LTM | 58,077 |
| FCF LTM | 313 |
| FCF 3Y Avg | 8,728 |
| CFO LTM | 96,690 |
| CFO 3Y Avg | 76,994 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 17.6% |
| Rev Chg 3Y Avg | 14.3% |
| Rev Chg Q | 20.1% |
| QoQ Delta Rev Chg LTM | 4.8% |
| Op Inc Chg LTM | 21.2% |
| Op Inc Chg 3Y Avg | 23.1% |
| Op Mgn LTM | 24.0% |
| Op Mgn 3Y Avg | 23.3% |
| QoQ Delta Op Mgn LTM | 0.2% |
| CFO/Rev LTM | 37.6% |
| CFO/Rev 3Y Avg | 36.3% |
| FCF/Rev LTM | 5.8% |
| FCF/Rev 3Y Avg | 12.6% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 1,604.8 |
| P/S | 7.7 |
| P/Op Inc | 29.0 |
| P/EBIT | 19.0 |
| P/E | 25.3 |
| P/CFO | 18.4 |
| Total Yield | 4.7% |
| Dividend Yield | 0.1% |
| FCF Yield 3Y Avg | 2.3% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Price Behavior
| Market Price | $114.35 | |
| Market Cap ($ Bil) | 10.6 | |
| First Trading Date | 03/24/2021 | |
| Distance from 52W High | -36.9% | |
| 50 Days | 200 Days | |
| DMA Price | $135.13 | $93.08 |
| DMA Trend | up | down |
| Distance from DMA | -15.4% | 22.9% |
| 3M | 1YR | |
| Volatility | 85.0% | 83.4% |
| Downside Capture | 394.65 | 258.95 |
| Upside Capture | 199.60 | 360.31 |
| Correlation (SPY) | 45.5% | 39.3% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 3.85 | 2.76 | 3.56 | 2.39 | 2.46 | 2.12 |
| Up Beta | 11.58 | 5.82 | 6.16 | 2.67 | 2.26 | 1.85 |
| Down Beta | 2.36 | 0.76 | 0.23 | 0.63 | 1.28 | 1.80 |
| Up Capture | -23% | 179% | 580% | 646% | 1496% | 4603% |
| Bmk +ve Days | 11 | 22 | 35 | 67 | 138 | 427 |
| Stock +ve Days | 10 | 19 | 31 | 66 | 129 | 373 |
| Down Capture | 385% | 279% | 296% | 175% | 161% | 112% |
| Bmk -ve Days | 11 | 21 | 28 | 59 | 114 | 326 |
| Stock -ve Days | 12 | 24 | 32 | 60 | 123 | 379 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with DOCN | |
|---|---|---|---|---|
| DOCN | 272.1% | 83.3% | 1.91 | - |
| Sector ETF (XLK) | 40.7% | 26.0% | 1.28 | 50.1% |
| Equity (SPY) | 20.3% | 12.9% | 1.16 | 39.2% |
| Gold (GLD) | 36.2% | 28.7% | 1.07 | 8.6% |
| Commodities (DBC) | 44.1% | 20.2% | 1.69 | 2.1% |
| Real Estate (VNQ) | 13.3% | 13.8% | 0.66 | -1.7% |
| Bitcoin (BTCUSD) | -38.8% | 43.2% | -1.01 | 18.8% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with DOCN | |
|---|---|---|---|---|
| DOCN | 15.4% | 72.3% | 0.50 | - |
| Sector ETF (XLK) | 19.8% | 25.9% | 0.68 | 55.7% |
| Equity (SPY) | 12.8% | 17.2% | 0.57 | 52.6% |
| Gold (GLD) | 20.4% | 18.6% | 0.89 | 6.6% |
| Commodities (DBC) | 10.2% | 19.6% | 0.40 | 7.1% |
| Real Estate (VNQ) | 2.4% | 18.9% | 0.02 | 34.2% |
| Bitcoin (BTCUSD) | 9.3% | 52.7% | 0.36 | 27.9% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with DOCN | |
|---|---|---|---|---|
| DOCN | 10.2% | 71.4% | 0.56 | - |
| Sector ETF (XLK) | 24.1% | 24.9% | 0.88 | 54.2% |
| Equity (SPY) | 15.2% | 17.9% | 0.72 | 50.9% |
| Gold (GLD) | 12.4% | 16.2% | 0.63 | 6.4% |
| Commodities (DBC) | 8.1% | 18.1% | 0.37 | 7.0% |
| Real Estate (VNQ) | 4.9% | 20.7% | 0.20 | 32.2% |
| Bitcoin (BTCUSD) | 61.0% | 66.1% | 1.01 | 25.9% |
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Returns Analyses
Earnings Returns History
Updated 8/13/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 8/4/2026 | 1.4% | 2.0% | |
| 5/5/2026 | 40.4% | 49.5% | 59.6% |
| 2/24/2026 | 5.9% | -1.7% | 43.3% |
| 11/5/2025 | 18.0% | 28.8% | 24.4% |
| 8/5/2025 | 28.9% | 9.4% | 18.6% |
| 5/6/2025 | -13.8% | -3.5% | -8.8% |
| 2/25/2025 | 9.8% | 8.6% | 2.2% |
| 11/4/2024 | -13.5% | -5.7% | -4.8% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 13 | 14 |
| # Negative | 8 | 9 | 7 |
| Median Positive | 10.8% | 13.9% | 21.5% |
| Median Negative | -9.6% | -5.0% | -10.6% |
| Max Positive | 40.4% | 49.5% | 59.6% |
| Max Negative | -24.8% | -29.2% | -42.7% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 8/4/2026 | 1.4% | 2.0% | |
| 5/5/2026 | 40.4% | 49.5% | 59.6% |
| 2/24/2026 | 5.9% | -1.7% | 43.3% |
| 11/5/2025 | 18.0% | 28.8% | 24.4% |
| 8/5/2025 | 28.9% | 9.4% | 18.6% |
| 5/6/2025 | -13.8% | -3.5% | -8.8% |
| 2/25/2025 | 9.8% | 8.6% | 2.2% |
| 11/4/2024 | -13.5% | -5.7% | -4.8% |
| 8/8/2024 | 11.9% | 25.8% | 33.6% |
| 5/10/2024 | 10.2% | 14.5% | 12.6% |
| 2/21/2024 | 8.7% | 4.1% | 11.1% |
| 11/2/2023 | 16.6% | 15.4% | 44.9% |
| 8/3/2023 | -24.8% | -25.0% | -42.7% |
| 5/9/2023 | 0.6% | -0.4% | 28.6% |
| 2/16/2023 | 7.8% | -0.8% | 3.3% |
| 11/7/2022 | -4.3% | 5.2% | -5.5% |
| 8/8/2022 | -1.5% | 1.7% | -15.5% |
| 5/4/2022 | -18.1% | -29.2% | 9.4% |
| 2/24/2022 | 18.6% | 35.0% | 28.6% |
| 11/4/2021 | 11.4% | 13.9% | -11.1% |
| 8/5/2021 | -2.3% | -5.0% | 9.1% |
| 5/6/2021 | -5.6% | -16.5% | -10.6% |
| SUMMARY STATS | |||
| # Positive | 14 | 13 | 14 |
| # Negative | 8 | 9 | 7 |
| Median Positive | 10.8% | 13.9% | 21.5% |
| Median Negative | -9.6% | -5.0% | -10.6% |
| Max Positive | 40.4% | 49.5% | 59.6% |
| Max Negative | -24.8% | -29.2% | -42.7% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 08/04/2026 | 10-Q |
| 03/31/2026 | 05/05/2026 | 10-Q |
| 12/31/2025 | 02/24/2026 | 10-K |
| 09/30/2025 | 11/05/2025 | 10-Q |
| 06/30/2025 | 08/05/2025 | 10-Q |
| 03/31/2025 | 05/06/2025 | 10-Q |
| 12/31/2024 | 02/25/2025 | 10-K |
| 09/30/2024 | 11/04/2024 | 10-Q |
| 06/30/2024 | 08/08/2024 | 10-Q |
| 03/31/2024 | 05/10/2024 | 10-Q |
| 12/31/2023 | 02/21/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/11/2023 | 10-Q |
| 03/31/2023 | 05/09/2023 | 10-Q |
| 12/31/2022 | 02/22/2023 | 10-K |
| 09/30/2022 | 11/07/2022 | 10-Q |
| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 08/04/2026 | 10-Q |
| 03/31/2026 | 05/05/2026 | 10-Q |
| 12/31/2025 | 02/24/2026 | 10-K |
| 09/30/2025 | 11/05/2025 | 10-Q |
| 06/30/2025 | 08/05/2025 | 10-Q |
| 03/31/2025 | 05/06/2025 | 10-Q |
| 12/31/2024 | 02/25/2025 | 10-K |
| 09/30/2024 | 11/04/2024 | 10-Q |
| 06/30/2024 | 08/08/2024 | 10-Q |
| 03/31/2024 | 05/10/2024 | 10-Q |
| 12/31/2023 | 02/21/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/11/2023 | 10-Q |
| 03/31/2023 | 05/09/2023 | 10-Q |
| 12/31/2022 | 02/22/2023 | 10-K |
| 09/30/2022 | 11/07/2022 | 10-Q |
| 06/30/2022 | 08/08/2022 | 10-Q |
| 03/31/2022 | 05/05/2022 | 10-Q |
| 12/31/2021 | 02/25/2022 | 10-K |
| 09/30/2021 | 11/05/2021 | 10-Q |
| 06/30/2021 | 08/06/2021 | 10-Q |
| 03/31/2021 | 05/07/2021 | 10-Q |
| 12/31/2020 | 03/24/2021 | 424B4 |
Recent Forward Guidance
Updated 8/5/2026Latest: Q2 2026 Earnings Reported 8/4/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q3 2026 Revenue | 304.00 Mil | 305.50 Mil | 307.00 Mil | ||||
| Q3 2026 Adjusted EBITDA Margin | 38.0% | 38.5% | 39.0% | ||||
| Q3 2026 Non-GAAP Diluted Net Income Per Share | 0.28 | 0.29 | 0.3 | ||||
| 2026 Revenue | 1.17 Bil | 1.18 Bil | 1.18 Bil | ||||
| 2026 Adjusted EBITDA Margin | 38.5% | 39.0% | 39.5% | ||||
| 2026 Adjusted Free Cash Flow Margin | 11.0% | 12.0% | 13.0% | ||||
| 2026 Non-GAAP Diluted Net Income Per Share | 1.35 | 1.38 | 1.4 | ||||
Prior: Q1 2026 Earnings Reported 5/5/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q2 2026 Revenue | 272.00 Mil | 273.00 Mil | 274.00 Mil | ||||
| Q2 2026 Adjusted EBITDA Margin | 37.0% | 37.5% | 38.0% | ||||
| Q2 2026 Non-GAAP diluted net income per share | 0.2 | 0.21 | 0.23 | ||||
| 2026 Revenue | 1.13 Bil | 1.14 Bil | 1.15 Bil | 4.4% | Raised | Guidance: 1.09 Bil for 2026 | |
| 2026 Adjusted EBITDA Margin | 37.0% | 38.0% | 39.0% | 1.0% | Raised | Guidance: 37.0% for 2026 | |
| 2026 Adjusted free cash flow margin | 9.0% | 10.5% | 12.0% | -5.5% | Lowered | Guidance: 16.0% for 2026 | |
| 2026 Non-GAAP diluted net income per share | 1.1 | 1.15 | 1.2 | 31.4% | Raised | Guidance: 0.88 for 2026 | |
| 2026 Revenue Growth | 26.0% | Raised | |||||
| 2027 Revenue Growth | 50.0% | ||||||
Q4 2025 Earnings Reported 2/24/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2026 Revenue | 249.00 Mil | 249.50 Mil | 250.00 Mil | 5.1% | Higher New | Guidance: 237.50 Mil for Q4 2025 | |
| Q1 2026 Adjusted EBITDA margin | 36.0% | 36.5% | 37.0% | -2.5% | Lower New | Guidance: 39.0% for Q4 2025 | |
| Q1 2026 Non-GAAP diluted net income per share | 0.22 | 0.24 | 0.27 | -34.7% | Lower New | Guidance: 0.38 for Q4 2025 | |
| 2026 Revenue | 1.07 Bil | 1.09 Bil | 1.10 Bil | 21.6% | Higher New | Guidance: 896.50 Mil for 2025 | |
| 2026 Adjusted EBITDA margin | 36.0% | 37.0% | 38.0% | -3.8% | Lower New | Guidance: 40.85% for 2025 | |
| 2026 Adjusted free cash flow margin | 15.0% | 16.0% | 17.0% | -2.5% | Lower New | Guidance: 18.5% for 2025 | |
| 2026 Unlevered adjusted free cash flow margin | 18.0% | 19.0% | 20.0% | ||||
| 2026 Non-GAAP diluted net income per share | 0.75 | 0.88 | 1 | -56.8% | Lower New | Guidance: 2.02 for 2025 | |
Q3 2025 Earnings Reported 11/5/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q4 2025 Revenue | 237.00 Mil | 237.50 Mil | 238.00 Mil | ||||
| Q4 2025 Adjusted EBITDA Margin | 38.5% | 39.0% | 39.5% | ||||
| Q4 2025 Non-GAAP Diluted Net Income Per Share | 0.35 | 0.38 | 0.4 | ||||
| 2025 Revenue | 896.00 Mil | 896.50 Mil | 897.00 Mil | 0.7% | Raised | Guidance: 890.00 Mil for 2025 | |
| 2025 Adjusted EBITDA Margin | 40.7% | 40.85% | 41.0% | 1.4% | Raised | Guidance: 39.5% for 2025 | |
| 2025 Adjusted Free Cash Flow Margin | 18.0% | 18.5% | 19.0% | 0.5% | Raised | Guidance: 18.0% for 2025 | |
| 2025 Non-GAAP Diluted Net Income Per Share | 2 | 2.02 | 2.05 | -2.4% | Lowered | Guidance: 2.08 for 2025 | |
Insider Activity
Updated 8/19/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Srinivasan, Padmanabhan T | Chief Executive Officer | Direct | Sell | 8192026 | 129.11 | 5,697 | 735,540 | 101,131,863 | Form |
| 2 | Barrett, Cherie | SVP, Chief Accounting Officer | Direct | Sell | 8172026 | 132.37 | 4,456 | 589,841 | 8,668,514 | Form |
| 3 | Adelman, Warren J | Direct | Sell | 8112026 | 124.01 | 4,200 | 520,855 | 8,362,569 | Form | |
| 4 | Steinfort, Matt | Chief Financial Officer | Direct | Sell | 6032026 | 170.07 | 10,000 | 1,700,700 | 91,568,069 | Form |
| 5 | Jenson, Warren | Direct | Sell | 5212026 | 147.62 | 20,000 | 2,952,400 | 4,797,207 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Srinivasan, Padmanabhan T | Chief Executive Officer | Direct | Sell | 8192026 | 129.11 | 5,697 | 735,540 | 101,131,863 | Form |
| 2 | Barrett, Cherie | SVP, Chief Accounting Officer | Direct | Sell | 8172026 | 132.37 | 4,456 | 589,841 | 8,668,514 | Form |
| 3 | Adelman, Warren J | Direct | Sell | 8112026 | 124.01 | 4,200 | 520,855 | 8,362,569 | Form | |
| 4 | Steinfort, Matt | Chief Financial Officer | Direct | Sell | 6032026 | 170.07 | 10,000 | 1,700,700 | 91,568,069 | Form |
| 5 | Jenson, Warren | Direct | Sell | 5212026 | 147.62 | 20,000 | 2,952,400 | 4,797,207 | Form | |
| 6 | Steinfort, Matt | Chief Financial Officer | Direct | Sell | 5192026 | 152.50 | 25,000 | 3,812,500 | 87,423,980 | Form |
| 7 | Schneider, Hilary | Direct | Sell | 5192026 | 156.38 | 4,338 | 678,376 | 3,803,631 | Form | |
| 8 | Access, Industries Holdings Llc | LLC | Sell | 5152026 | 150.30 | 3,300,000 | 495,990,000 | 17,973,926 | Form | |
| 9 | Access, Industries Holdings Llc | LLC | Sell | 5112026 | 159.97 | 181,147 | 28,977,237 | 3,468,188,027 | Form | |
| 10 | Access, Industries Holdings Llc | LLC | Sell | 5112026 | 150.98 | 210,659 | 31,805,555 | 3,300,754,979 | Form | |
| 11 | Steinfort, Matt | Chief Financial Officer | Direct | Sell | 3032026 | 55.40 | 20,000 | 1,108,000 | 30,243,746 | Form |
| 12 | Barrett, Cherie | SVP, Chief Accounting Officer | Direct | Sell | 3032026 | 54.77 | 22,000 | 1,204,940 | 3,421,427 | Form |
| 13 | Saha, Bratin | Chief Product & Tech Officer | Direct | Sell | 9032025 | 31.87 | 13,010 | 414,629 | 8,587,850 | Form |
Investor Activity (13F)
Updated Aug 21, 2026Active managers (13F portfolio over $250M, at least 3 holdings) with a position over $5M that is either over 10% of their portfolio or held in a concentrated book of 50 or fewer total positions. Index/ETF, sovereign, bank, community-bank and charitable/donor-advised filers are excluded.
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | Filing |
|---|---|---|---|---|---|
| Gladstone Capital Management LLP | $42.6 Mil | 4.3% | 32 | New | 13F |
| California First Leasing Corp | $7.5 Mil | 2.4% | 39 | Hold | 13F |
| Thames Capital Management LLC | $12.5 Mil | 2.2% | 43 | New | 13F |
| BWCP, LP | $11.9 Mil | 1.8% | 27 | New | 13F |
| Science & Technology Partners, L.P. | $5.9 Mil | 1.5% | 42 | New | 13F |
| Glenview Capital Management, LLC | $21.4 Mil | 0.6% | 41 | TRIM -87.5% | 13F |
| Active Manager | Value | % of Portfolio | Total Positions | QoQ | Filing |
|---|---|---|---|---|---|
| Gladstone Capital Management LLP | $42.6 Mil | 4.3% | 32 | New | 13F |
| Glenview Capital Management, LLC | $21.4 Mil | 0.6% | 41 | TRIM -87.5% | 13F |
| Thames Capital Management LLC | $12.5 Mil | 2.2% | 43 | New | 13F |
| BWCP, LP | $11.9 Mil | 1.8% | 27 | New | 13F |
| California First Leasing Corp | $7.5 Mil | 2.4% | 39 | Hold | 13F |
| Science & Technology Partners, L.P. | $5.9 Mil | 1.5% | 42 | New | 13F |
DOCN Trade Sentinel
Constructive
CONVICTION RATIONALE
DigitalOcean's pivot to an AI-native cloud is driving a dramatic re-acceleration in growth. Forward-looking indicators, like a 12x increase in committed revenue backlog to $894 million, provide high visibility. While current cash flow is negative due to investment, management's guidance for a positive 11-13% adjusted free cash flow margin for 2026 suggests this pressure is temporary.
STOCK ARCHETYPE
Consumption-based Infrastructure & Platform(Number of Customers) x (Average Usage per Customer), with a strong emphasis on increasing usage within the high-spending DNE and AI customer cohorts. Operating leverage from scaling revenue on a fixed infrastructure base, and a mix shift towards higher-margin, software-based services (like the inference engine and managed services) on top of commodity infrastructure.
INVESTMENT THESIS
Evidence suggests a successful transition is underway, creating a new, steeper growth curve built on high-value AI workloads and larger customer commitments.
- Remaining Performance Obligations (RPO) increased over 12x YoY to $894 million.
- AI Customer ARR reached $234 million, growing over 200% year-over-year.
- Revenue growth accelerated for the third straight quarter to 28.6% YoY.
- Management raised FY2026 revenue growth outlook to approximately 30.5%.
- The company landed its first 9-figure annual customer commitment in Q2.
PRIMARY RISK
The cost of competing in AI infrastructure is pressuring financials, with negative free cash flow of $-3.8 million and gross margins falling to 55%. As a sub-scale player, the company may be unable to achieve profitability against hyperscale competitors.
- Trailing-twelve-month free cash flow is negative $-3.8 million.
- Latest-quarter gross margin fell to 55% from 59.9% a year ago.
- Capital expenditure is high at 31% of trailing-twelve-month revenue.
- Competitor Microsoft's capex is $115.9 billion.
- Stock-based compensation is 9.4% of revenue with minimal buyback offset.
| KPI | Status | Rationale |
|---|---|---|
| AI Customer Annual Run-rate Revenue (ARR) | $234 million for the quarter ended June 30, 2026 - Accelerating | The year-over-year growth in AI Customer ARR has been exceptionally strong, accelerating significantly from Q4 2025 into Q1 2026 and maintaining a triple-digit growth rate in the most recent quarter. This indicates powerful momentum and successful capture of demand for AI workloads. |
| $1M+ Customer Annual Run-rate Revenue (ARR) | Not explicitly stated in dollar terms for Q2 2026, but growth was disclosed. - Accelerating | The growth rate for the company's largest customer cohort is not only in the triple digits but is also accelerating each quarter. Management noted on the latest earnings call that this has been the case for eight consecutive quarters, signaling a successful strategic shift to serving and retaining larger customers. |
| Digital Native Enterprise (DNE) Customers | 21,736 (as of 6/30/2026) | Represents the number of customers spending more than $500 per month, indicating the size of the company's core, substantial customer base. |
| $1M+ Customers | 45 (as of 6/30/2026) | Tracks the number of the company's largest customers, whose ARR is growing at over 200% year-over-year, acting as a primary growth engine. |
Contract growth vs. margin burn.
BULL VIEW
The 12x explosion in committed contracts (RPO) is a leading indicator of future high-margin revenue, justifying the current investment and temporary margin dip.
CORE TENSION
Can accelerating demand, evidenced by $894M in RPO, generate operating leverage faster than capital investment, which drove FCF to $-3.8M, consumes cash?
PREVAILING SENTIMENT
Leading indicators favor the bull case. The massive, 12x growth in contractually obligated revenue provides strong visibility that outweighs the lagging impact of current investment.
BEAR VIEW
The 4.9 percentage point drop in quarterly gross margin reflects the unsustainable cost of competing with giants, a structural issue that new contracts cannot fix.
| Timeline | Event & Metric To Watch |
|---|---|
9/7/2026 - 10/28/2026 | Peer Cloud Commentary Watch: Peer commentary on cloud infrastructure demand, GPU supply constraints, and pricing trends for AI workloads. |
10/27/2026 | Microsoft Earnings Report Watch: Peer Microsoft (MSFT) is scheduled to report earnings. |
10/27/2026 | Alphabet Earnings Report Watch: Peer Alphabet (GOOGL) is scheduled to report earnings. |
11/3/2026 | Margin And Execution Update Watch: Updated guidance on gross margin trajectory and confirmation of the Memphis data center launch timeline. |
11/3/2026 | High Volatility And Expectations Watch: The stock's reaction to the Q3 earnings report, given the high expectations and priced-in uncertainty. |
second half of 2026 | Memphis Data Center Launch Watch: The company's Memphis data center is scheduled for launch. |
within the next 12 months | Convertible Notes Maturity Watch: A portion of the company's convertible notes are scheduled to mature. |
October 13 | AI Builder Summit Watch: The company will host an AI Builder Summit in San Francisco. |
| Date | Event | Stock Impact |
|---|---|---|
2026-08-04 | Q2 2026 Earnings Reported Details: The company announced Q2 results with revenue growth of 29% year-over-year. Guidance for key metrics remained unchanged. The stock had a -2.0% two-day reaction. | -2.1% $127.17 -> $124.46 |
2026-07-24 | Balance Sheet Restructuring Details: The company announced the repurchase of approximately $472 million of its 2030 convertible notes, funded by a concurrent registered direct offering of common stock to reduce leverage. | -8.3% $131.15 -> $120.20 |
2026-06-10 | New Executive Leadership Hired Details: The company announced three additions to its executive leadership team: a Chief Revenue Officer, Chief Marketing Officer, and Chief Legal & Administrative Officer. | +3.8% $168.33 -> $174.75 |
2026-05-05 | Q1 2026 Earnings Beat Details: The company reported Q1 2026 results, leading to a two-day stock reaction of +48.0% versus 2.0% for the S&P 500. | +48.0% $108.81 -> $160.99 |
2026-04-28 | AI-Native Cloud Unveiled Details: The company introduced the DigitalOcean AI-Native Cloud, an integrated platform for inference and agentic workloads, at its Deploy conference. | -2.1% $98.95 -> $96.87 |
2026-03-25 | Upsized Public Stock Offering Details: The company announced the pricing of an upsized public offering of 10,389,611 shares for gross proceeds of approximately $800 million. | +0.8% $84.92 -> $85.62 |
2026-02-24 | Q4 2025 Earnings Reported Details: The company announced its fourth quarter and fiscal year 2025 financial results. The stock had a 0.0% two-day reaction around the earnings call. | +0.1% $59.24 -> $59.27 |
Position Sizing
1% - 2%
MINIMAL POSITION
Sizing is volatility-based: DOCN trades at roughly 98% annualized options-implied volatility versus about 14% for the S&P 500 (7.2x the market), around the 96th percentile of its own trailing year. A 1% - 2% position keeps a single-name swing of that size within a diversified portfolio's risk budget.
Diversification Alternatives
MSFT - Microsoft
Hyperscale AI LeaderMicrosoft offers exposure to the AI theme at immense scale, with far greater infrastructure investment ($115.9 billion in capex) and a dominant enterprise customer base.
AKAM - Akamai Technologies
Niche Cloud ProviderAkamai provides a more mature, stable financial profile in the niche cloud market, with comparable operating margins but without the hyper-growth investment cycle.
DigitalOcean is no longer just a simple cloud for developers; it is an accelerating, profitable 'AI-Native Cloud' platform winning high-value inference workloads from sophisticated, fast-growing AI companies.
The company has successfully pivoted to serve the high-demand AI inference market, differentiating itself from pure GPU rental providers ('Neoclouds') with a full-stack, integrated software platform. This strategy is attracting larger, more committed customers and driving revenue acceleration well ahead of prior expectations. The emerging 'AI-native flywheel' effect, where AI services pull through higher-margin core cloud products, is key to its long-term, durable growth thesis.
Continued acceleration in AI Customer ARR, signing of more large multi-year customer commitments, and evidence of the 'flywheel' effect with rising core cloud attachment rates for AI customers.
A slowdown in DNE or AI customer growth, significant margin compression due to GPU costs that isn't offset by software revenue, or evidence that 'Neocloud' competitors are successfully replicating its integrated software stack.
Fluctuations in the number of smaller, non-DNE customers or short-term stock price volatility around earnings.
Repricing Catalyst
The significant acceleration in revenue growth to 28.6% YoY, a more than 12x increase in Remaining Performance Obligations (RPO), and raised full-year guidance, which validates the success of the AI strategy and provides a clear path to strong performance in 2027.
DigitalOcean — Investor Video Playlist
Industry Resources
| Information Technology Resources |
| TechCrunch |
| Wired |
| CIO |
| MIT Technology Review |
| Gartner Insights |
| Ars Technica |
| Internet Services & Infrastructure Resources |
| Data Center Dynamics |
| Data Center Frontier |
| Internet Society |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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