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BROOMFIELD, Colo.--(BUSINESS WIRE)--DigitalOcean Holdings, Inc. (NYSE: DOCN), the AI-Native Cloud, purpose-built for inference and agentic workloads, today announced the closing of a private repurchase (the “Repurchase”) of approximately $472 million of its 0.00% convertible senior notes due 2030 (the “2030 Convertible Notes”) and a registered direct offering of shares of common stock to holders of 2030 Convertible Notes participating in the Repurchase (the “Registered Direct Offering”). As a r.

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades, downgrades and initiations, please see our analyst ratings page.

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DigitalOcean: Consistent Revenue StepsDigitalOcean (DOCN +2.51%) provides a global cloud computing environment that delivers on-demand infrastructure and developer tools to individuals and small businesses.

It launched an inference engine for agentic workloads in April 2026, while reporting 6% net income margin for the quarter ended March 31, 2026.

Datadog: Scaling Top-Line GrowthDatadog (DDOG +3.98%) offers a cloud-based monitoring and analytics solution that automates infrastructure oversight and application tracking for developers and operations personnel.

It introduced hardware tracking capabilities in April 2026, and posted 5% net income margin for the quarter ended March 31, 2026.

Why Revenue Matters for Retail InvestorsRevenue shows the total money brought in by operations before any expenses are deducted. This metric reveals whether an organization is successfully attracting customers and growing its overall business volume over time.

Quarterly Revenue for DigitalOcean and DatadogQuarter (Period End)DigitalOcean RevenueDatadog RevenueQ2 2024 (June 2024)$192.5 million$645.3 millionQ3 2024 (Sept. 2024)$198.5 million$690.0 millionQ4 2024 (Dec. 2024)$204.9 million$737.7 millionQ1 2025 (March 2025)$210.7 million$761.6 millionQ2 2025 (June 2025)$218.7 million$826.8 millionQ3 2025 (Sept. 2025)$229.6 million$885.7 millionQ4 2025 (Dec. 2025)$242.4 million$953.2 millionQ1 2026 (March 2026)$257.9 million$1.0 billionData source: Company filings. Data as of July 13, 2026.

Foolish TakeExamining the revenue trends for DigitalOcean and Datadog reveal they are excellent companies for investors seeking tech stocks to add to their portfolios. Both are experiencing rising revenue, with every quarter’s sales exceeding the last. That’s quite an accomplishment to maintain consistently over time.

Alongside its outstanding revenue growth, DigitalOcean notched accomplishments recently that make it a compelling investment. It was added to the Russell 1000 Index at the end of June. On July 7, it announced that it expects sales growth to accelerate to 29% year over year in the second quarter, an improvement over Q1’s 22% year-over-year increase.

Datadog’s business is also looking impressive as Q1 revenue reached $1 billion, representing a strong 32% jump up from the previous year. Achieving that kind of growth when its sales are so much higher than DigitalOcean’s is noteworthy, indicating its business is booming. This makes sense since artificial intelligence relies on data to function, and that’s Datadog’s bread and butter, making its platform an attractive choice for customers.

It’s ideal to own shares in both, since the expansion of the AI market provides a multi-year tailwind for these businesses.

Robert Izquierdo has positions in Datadog and DigitalOcean. The Motley Fool has positions in and recommends Datadog and DigitalOcean. The Motley Fool has a disclosure policy.

The architectural landscape of cloud infrastructure is fracturing. For years, the market assumed legacy hyperscalers like Amazon NASDAQ: AMZN and Microsoft NASDAQ: MSFT would control the enterprise server space indefinitely, leaving smaller infrastructure providers to fight over budget-conscious developers.

DigitalOcean Today

$143.20 +2.73 (+1.94%)

As of 11:02 AM Eastern

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52-Week Range$25.56▼

$187.50P/E Ratio62.37

Price Target$145.36

That paradigm shifted on June 7, 2026, as DigitalOcean Holdings NYSE: DOCN defied a broadly declining macroeconomic backdrop and rose by more than 10% following a highly bullish preliminary second-quarter earnings release. The price action signals something much deeper than an earnings beat. The market is witnessing a pivot as smaller independent cloud providers capture high-margin, enterprise-scale workloads.

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Investors chasing this momentum should unpack the underlying data to separate the growth story from the temporary distortions of short covering and passive index accumulation, because when you look closely, you can observe how DigitalOcean is changing the tide in the enterprise artificial intelligence sector.

Reeling in Revenue: Accelerating Top-Line MetricsAnalyzing the second-quarter pre-announcement reveals the distinct drivers behind the sudden upside volatility. Management now forecasts second-quarter revenue of $282.1 million, a 29% year-over-year acceleration. This decisively eclipses Wall Street’s consensus estimate of $273.6 million and marks a steep re-acceleration from the 14% growth recorded in the second quarter of last year.

While the top-line beat is impressive, the forward-looking metrics are fundamentally resetting valuation models across the sector. DigitalOcean reported remaining performance obligations exceeding $800 million. Remaining performance obligations act as a reliable leading indicator of future revenue, representing contracted but unrecognized sales.

Adding $550 million to this pipeline in a single quarter is a feat of management, reflecting a greater than tenfold increase from the prior year. The weighted-average contract life has also extended from 1.6 years to over three years. By locking in long-term capital, DigitalOcean is preserving adjusted EBITDA margins despite executing heavy infrastructure spending.

Deep Water Infrastructure: The Enterprise AI PivotThe historic surge in contracted revenue requires a permanent re-evaluation of DigitalOcean's target demographic. Historically, the broader market categorized the business as a volume-driven host for small businesses or independent software developers. A low average revenue per user model traditionally struggles during periods of macroeconomic tightening, as smaller clients churn or downsize their hosting plans to survive.

Management explicitly attributes the recent $550 million pipeline jump to multiple nine-figure annual customer commitments strictly tied to inference and AI workloads. Nine-figure contracts are fundamentally incompatible with small business budgets. These agreements are the domain of highly funded enterprise AI labs and institutional research divisions. DigitalOcean is effectively pivoting from a budget-friendly hosting service to a heavyweight player in AI infrastructure.

To support these enterprise contracts, DigitalOcean deployed capital from a recent $800 million equity offering to secure an additional 20 megawatts of data center capacity for late 2027 and early 2028. This brings the total committed capacity to 155 megawatts. By focusing on purpose-built architectures, such as its proprietary inference routing software, DigitalOcean is winning strictly on total cost of ownership against the major hyperscalers, avoiding a margin-crushing race to the bottom on pricing.

Currents of Capital: Institutional Buy-In Vs. Insider ExitsUnderstanding the mechanics of the current price action requires looking under the hood at market sentiment and institutional capital flows. Options flow reflects a strong upside bias, with the volume put-to-call ratio dropping to 0.18 and total contract volume rising above 136% of the average daily volume.

Overall MarketRank™73rd Percentile

Analyst RatingModerate Buy

Upside/Downside3.6% Upside

Short Interest LevelHealthy

Dividend StrengthN/A

News Sentiment0.72 Insider TradingSelling Shares

Proj. Earnings Growth57.41%

See Full Analysis

This bullish derivatives activity is colliding directly with forced buying in the underlying equity. Short interest currently sits at approximately ~12% of the public float, translating to roughly 12.2 million shares shorted. With a days-to-cover ratio nearing four, the double-digit intraday climb is undoubtedly exacerbated by short sellers scrambling to close underwater positions. Institutional ownership commands ~50% of outstanding shares (down from around ~90%), creating a structural floor that successfully absorbed the dilution from the recent equity offering.

Despite the institutional accumulation, retail investors should consider internal structural headwinds. Over the trailing three months, insiders liquidated approximately $565.9 million in stock. The bulk of this distribution came from major shareholder Access Industries, along with multi-million-dollar sales from key executives. With zero open-market insider purchases during this period, internal leadership is clearly utilizing the elevated valuation to take profits.

Sailing Close to the Wind: At 57x Earnings?The fundamental momentum backing DigitalOcean is undeniable, and the expanding contracted revenue provides visibility through 2026. However, market mechanics and valuation multiples should still matter for investors entering at these levels.

DigitalOcean commands a premium trailing price-to-earnings ratio of ~57x. A valuation this rich leaves very little room for operational missteps, particularly in a high-interest-rate environment where the broader technology sector remains highly sensitive to changes in the cost of capital.

The recent addition of DigitalOcean to the Russell 1000 index has led to continued passive index accumulation, creating an artificial tailwind for the share price. Investors should first acknowledge that DigitalOcean is currently priced for perfection, and the heavy insider distribution suggests that early institutional backers have already made the easy money.

Dropping Anchor: Rigging the Deck for an AI PivotThe cloud computing narrative is undergoing a fundamental shift, revealing that nimble, cost-effective infrastructure providers can thrive alongside the trillion-dollar tech giants. DigitalOcean is proving that independent operators can successfully capture enterprise market share without sacrificing profitability. The pivot toward artificial intelligence infrastructure is entirely resetting the forward growth trajectory and shielding DigitalOcean from the high-churn risks typically associated with small business clients.

The underlying data support the bullish price action, driven by tangible contract expansions rather than speculative hype. Investors evaluating the infrastructure space might consider adding DigitalOcean to their watchlist as a high-growth alternative to mega-cap technology stocks, provided they have the risk tolerance for premium valuation multiples and post-squeeze volatility.

Should You Invest $1,000 in DigitalOcean Right Now?Before you consider DigitalOcean, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and DigitalOcean wasn't on the list.

While DigitalOcean currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

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On July 07, 2026, DigitalOcean Holdings Inc (DOCN) shares rose 4.3% today, bringing the current price to $137.04. Over the past week, the stock has decreased by

DigitalOcean (DOCN) is experiencing a positive surge as it projects record results for Q2. The company expects remaining performance obligations (RPO) to exceed

U.S. stocks were mixed, with the Nasdaq Composite falling around 1% on Tuesday.

Also, the company expects to be at or above the top end of the range of its previously provided guidance for EBITDA margin and non-GAAP net income per share.

DigitalOcean shares surged 10.4% to $145.04 on Tuesday.

Here are some other big stocks recording gains in today’s session.

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DigitalOcean is positioned for a major inflection, targeting at least 50% revenue growth in 2027, driven by AI-focused cloud offerings. DOCN's platform upgrades and open ecosystem uniquely attract AI startups seeking scalable, cost-effective infrastructure solutions. Management's track record of conservative guidance and consistent outperformance enhances confidence in DOCN's ambitious free cash flow targets.

DigitalOcean Holdings, Inc. (DOCN) Q1 2026 Earnings Call Transcript

Digital Ocean NYSE: DOCN is an AI infrastructure play potentially beyond compare. It not only owns and operates a network of high-performance data centers but also has the software stack to support them. It is a cloud computing solution for small and medium-sized businesses, enabling them access and scalability alongside ease of use, and the business is gaining traction. Plans include expanding its footprint over the coming year, driven by a rising tide of AI demand; the question for investors is how high this AI play can go.

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DigitalOcean Accelerates, Outperforms, and Raises GuidanceDigitalOcean had a solid Q1 earnings report, with revenue growth topping 22%, accelerating sequentially and compared to the prior year.

DigitalOcean Today

$172.44 -2.32 (-1.32%)

As of 09:44 AM Eastern

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52-Week Range$25.56▼

$184.46P/E Ratio75.51

Price Target$146.36

Revenue outpaced the consensus by a substantial margin, indicating a fundamental misunderstanding of the growth opportunity, and is expected to continue accelerating in the upcoming quarters. Growth was driven by large clients and AI demand, with annual run-rate revenue (ARR) from large clients up by 180% and AI-related ARR up by 221%.

Margin news was mixed, with margin contracting in some comparisons and expanding in others. The critical details are that the core business is profitable, profitability improves with scale, and weaknesses are tied to spending increases. Spending increases aim to increase capacity and underpin management's decision to increase guidance. They now expect at least 50% revenue growth in the subsequent fiscal year and may be cautious in the estimate. The company is already expanding its footprint, and pricing is a factor to consider as well. Demand for GPU capacity is driving rental prices through the roof, and DigitalOcean is exposed to the market.

Strong Market Getting Stronger, But Upside May Be LimitedThe MACD indicator suggests that this rally is just getting started. It is a measure of market momentum and can be used to gauge whether a market is strengthening or weakening. In this case, the convergence between the MACD peak and price action suggests the market is strengthening and likely to continue higher over the long term, with periodic corrections aside.

Analysts, institutions, and valuation suggest the upside may be limited, but they are not the only factors in play. Analysts rate the stock as a conviction Moderate Buy with 75% Buy-side bias, but price action has outpaced the consensus price target. The likely outcome is that DOCN stock price corrects at some point, touching base with the consensus level before continuing its advance in the longer term. Additionally, institutions were selling heavily in late 2025 and early 2026, which presents a headwind for the market and could amplify any correction that forms.

Valuation is the biggest concern, as the stock trades at over 125X its current-year earnings forecast. The market is pricing in a robust outlook, but even so, valuation is expected to fall only slightly over the next few years, leaving the stock highly valued relative to its forecasts and tech peers. The worst-case scenario is that this company fails to meet its outlook, leading to a market reset and a massive stock price correction, but that is unlikely given the recent Q1 results and the guidance update.

2 Catalysts for DOCN Price Action May StrengthenWhile analysts and institutions limit the upside potential, they also provide support for this market. The market has outrun the consensus price target, but the trend remains positive, with recent revisions leading it into the high end of the range. Those revised price targets would be sufficient for more than 30% upside from the $150 level, where the DOCN stock price surged following the report. Institutions, on the other hand, sold heavily in early 2026 but reverted to buying in early Q2 and may continue to accumulate as the quarter progresses.

Catalysts for this stock include its aggressive expansion. The plans include more than tripling total capacity by early 2028, potentially driving revenue growth into the triple-digit range and sustaining it for several quarters. Risks include the cost of buildout, including a nearly-$1 billion equity raise, and the threat of dilution. As it stands, the share count is up approximately 10% at the end of Q1, and though the company is well-capitalized, additional funding is not out of the question. Delays, missteps, and cost-overruns will be reflected in the stock price.

DigitalOcean is leaning on debt to fund its expansion, and its balance sheet can handle the load. Highlights at Q1’s end include increased cash, current and total assets, with long-term debt and liabilities declining, equity improving, a net-cash position, and low total leverage. The likely outcome is that cash flow will enable debt reduction as the buildout progresses, with cash flow increasing over time and equity rising alongside it.

Should You Invest $1,000 in DigitalOcean Right Now?Before you consider DigitalOcean, you'll want to hear this.

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While DigitalOcean currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

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DigitalOcean (DOCN 0.86%) is a cloud computing company that provides hundreds of services to small and medium-sized businesses (SMBs), enabling them to thrive in the digital age. The company is investing aggressively in artificial intelligence (AI) infrastructure to help its customers deploy this revolutionary technology in a simple and cost-effective way.

On May 5, DigitalOcean released its first-quarter 2026 operating results. The report was so strong that its stock blasted higher by 40%, to close at $152.77 on the day. According to The Wall Street Journal, even the most bullish analyst on Wall Street had predicted the stock would reach just $121 over the next 12 months.

Were analysts underestimating DigitalOcean, or is it simply overvalued now?

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DigitalOcean continues to expand its AI product portfolio The cloud industry is dominated by trillion-dollar giants like Amazon and Microsoft, but they mostly target large enterprises because they have the highest spending potential. This leaves the SMB cloud market wide open for providers like DigitalOcean. It captures these customers by offering affordable pricing, highly personalized support, and a simple dashboard to make deploying services easy.

In the first quarter, the company launched a new platform, DigitalOcean AI-Native Cloud, comprising five distinct layers. The bottom (and most important) layer is infrastructure, which includes 20 data centers fitted with the latest AI chips from suppliers like Nvidia and Advanced Micro Devices. DigitalOcean rents the computing capacity to its SMB customers, which can use it to deploy AI applications.

The other four layers work together to help SMBs turn all of that computing power into working AI software, whether they want to build data analysis tools, chatbots, or agents. The platform offers access to the latest AI foundation models from leading start-ups like OpenAI, which can help customers accelerate their development goals.

DigitalOcean allows customers to start with one chip and scale up as needed, which is perfect for running small AI workloads like web-based customer-service chatbots or agents. And the company is staying true to its original cloud business model, allowing customers to pay as they go with no lock-in contracts.

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DigitalOcean just significantly raised its revenue growth forecast DigitalOcean ended the first quarter with $1.03 billion in annual run-rate revenue (ARR), a 22% increase from the year-ago period. It was the third consecutive quarter of accelerating growth, highlighting the company's incredible momentum.

AI customers, specifically, accounted for $170 million of DigitalOcean's ARR at the end of the first quarter, and that figure soared by an eye-popping 221% year over year. Simply put, products like the AI-Native Cloud are quickly becoming the growth engine for the entire company, and that's likely to continue, as demand for computing capacity outstrips supply.

For that reason, DigitalOcean raised $800 million from investors in March, which will go toward building more AI data centers. As more capacity comes online, revenue growth is likely to accelerate further. In fact, management just raised its 2027 growth forecast from 30% to 50%, which is a big reason why DigitalOcean stock rocketed higher on May 5.

DigitalOcean stock is no longer cheap Based on DigitalOcean's trailing-12-month revenue, its stock is trading at a price-to-sales (P/S) ratio of 17, which is twice its long-term average of 8.1. If we assume the company grows its revenue by more than 50% in 2027, its forward P/S ratio is around 9.2.

Data by YCharts.

From that perspective, there probably isn't much upside left in the tank in the short term. In my opinion, the stock would be a good buy right now if the company could maintain a similar rate of revenue growth in 2028 and beyond, but management hasn't provided any long-term guidance just yet.

In light of DigitalOcean's spectacular first-quarter report, the stock has blown past even the most bullish price targets on Wall Street, and I expect many analysts to raise their forecasts soon. However, since the stock certainly isn't cheap, investors who buy it today need to maintain a long-term view of at least three years (but preferably more) to maximize their chances of earning a positive return. That time frame will give DigitalOcean time to grow into its valuation.

Nvidia (NVDA +0.64%) remains the center of the artificial intelligence boom, but the stock is up just 15% in 2026, both because investors worry the current pace of AI spending is unsustainable and because they question the durability of Nvidia's dominance in the AI infrastructure market.

Meanwhile, DigitalOcean (DOCN 0.86%) is a little-known cloud computing company whose aggressive expansion into AI services has led to tremendous shareholder returns. The stock is up 240% this year, and most Wall Street analysts say it's still undervalued. The median target price of $177 per share implies 8% upside from its current share price of $164.

Here's what investors should know about these AI stocks.

Image source: Getty Images.

Nvidia: The dominant supplier of AI infrastructure Nvidia dominates the artificial intelligence infrastructure. The company is best known for its GPUs, chips that accelerate AI workloads, but its greatest competitive strength lies in vertical integration. Nvidia builds rack-scale AI systems comprising chips and networking, and it supplements its hardware with an unmatched software ecosystem of developers.

That full-stack strategy affords Nvidia a durable competitive moat. The company has nearly 90% market share in AI accelerators, and it captures over 40% of AI data center spending. Nvidia may lose some market share in the coming years as custom chips (e.g., Alphabet's TPU) become more popular, but it will almost certainly remain the dominant supplier of AI infrastructure.

"Our pace of innovation, particularly at our scale, is unmatched, fueled by an annual R&D budget approaching $20 billion and our ability to extreme co-design across compute and networking across chips, systems, algorithms, and software," CFO Colette Kress recently told analysts. "We intend to deliver x-factor leaps in performance per watt every generation and extend our leadership position over the long term."

Nvidia has an important catalyst on the horizon in the upcoming launch of its Vera Rubin platform, which brings together Rubin GPUs and Vera CPUs. It works with Groq 3 LPUs (language processing units) to speed up inference tasks. When paired with LPUs, Rubin GPUs deliver up to 35 times more throughput per watt than the previous generation of Blackwell GPUs.

Wall Street estimates Nvidia's adjusted earnings will increase at 53% annually through the fiscal year ending in January 2028. That makes the current valuation of 45 times adjusted earnings look quite reasonable. It's not too late for patient investors to buy Nvidia.

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DigitalOcean: The cloud company simplifying AI services DigitalOcean provides cloud infrastructure and platform services to small and medium-sized businesses, particularly those in the technology sector. Hyperscalers like Amazon and Microsoft undoubtedly have broader portfolios, but their products are built for large customers with complex needs, deep pockets, and large IT departments.

By comparison, DigitalOcean offers fewer and less advanced services, but its platform is designed to simplify cloud computing. Its intuitive user interface with click-and-go options lets developers spin up servers and deploy applications quickly, often in just a few minutes. DigitalOcean also provides no-cost 24/7 technical support to all customers.

The number of inference tokens processed daily is projected to grow over tenfold by 2030, meaning demand for AI infrastructure is expected to increase substantially. DigitalOcean hopes to capitalize on this boom with its AI-Native Cloud, which brings together the servers and software needed for agentic workloads. CEO Paddy Srinivasan called it the "most significant product launch" in company history.

DigitalOcean reported solid first-quarter financial results. Revenue increased 22% to $258 million, driven by exceptionally strong sales growth among AI customers. Non-GAAP net income dropped 21% to $0.44 per diluted share, but that was due to significant spending on AI infrastructure. "We beat every financial target we shared in our last call," Srinivasan told analysts.

DigitalOcean also gave very encouraging guidance, bolstered by what Srinivasan sees as a "generational market opportunity" in AI. The company says revenue growth will hit 26% in 2026, before accelerating to over 50% in 2027. Management previously predicted revenue would grow 30% next year, but the company recently secured 60 megawatts of additional compute capacity that will boost sales.

Wall Street estimates DigitalOcean's adjusted earnings will grow at 23% annually through 2028. That makes the current valuation of 81 times adjusted earnings look expensive. The market is excited by the upward revision to revenue guidance, and the stock has climbed more than 50% since the company reported earnings on May 5. I think investors should wait for a pullback before buying shares, or at least keep any purchases very small.

On May 12, 2026, DigitalOcean Holdings Inc DOCN shares fell 5.0% today, closing at $155.72. This decline comes despite a remarkable performance over the past year, with the stock soaring 392.6%. DOCN has experienced a 52-week high of $164.77 and a low of $25.56, highlighting significant volatility.

GF Value™ verdict: Current price of $155.72 is 250.0% overvalued compared to the GF Value™ of $44.49.GF Score™ of 75/100 indicates that DOCN is above average in overall quality and performance.Notable signal: Insiders sold $63.1 million in shares over the past three months, with no buying activity reported. Is DOCN Overvalued or Undervalued? According to the GF Value™, DigitalOcean is significantly overvalued at its current price of $155.72. The estimated fair value of $44.49 indicates a substantial 250.0% downside risk. This overvaluation suggests that the stock may be trading at a premium compared to its intrinsic value, making it less attractive for potential investors. The significant gap between the current price and the GF Value™ underscores the need for caution, as the potential for a price correction exists if market sentiment shifts.

GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Given the current overvaluation, investors might consider the risks associated with holding or entering a position in DOCN at this price level.

How Does DOCN's Valuation Compare to Its History? MetricCurrentHistorical P/E (TTM)68.0x41.6x (5-Year Median) Forward P/E138.7xN/A The current P/E ratio of 68.0x is significantly above its 5-year median of 41.6x, indicating that DOCN is trading at a premium compared to its historical valuation. Moreover, the forward P/E of 138.7x further emphasizes the high expectations that the market has for the company's future earnings. This P/E analysis aligns with the GF Value™ verdict of overvaluation, suggesting that the stock may not be justified at its current price based on historical earnings metrics.

What Does DOCN's GF Score™ Tell Us? MetricRating GF Score™75/100 Financial Strength6/10 Profitability5/10 Growth10/10 Valuation1/10 Momentum6/10 The GF Score™ of 75/100 indicates that DigitalOcean is above average in terms of overall quality and performance. Its strongest aspect is growth, rated at 10/10, reflecting the company’s robust revenue expansion and market position. However, the valuation rank of 1/10 is concerning, highlighting the stock's significant overvaluation relative to its intrinsic value. The financial strength and profitability ranks suggest moderate stability, but they do not compensate for the valuation concerns. Overall, while there are positive growth prospects, the valuation remains a critical weakness.

What Are Insiders Doing with DOCN Stock? In the last three months, insiders at DigitalOcean have sold a substantial $63.1 million worth of shares, with no buying activity reported. This pattern of selling may indicate a lack of confidence from those closest to the company regarding its current valuation or future performance. High insider selling can often be a red flag for potential investors, suggesting that insiders may believe that the stock price is stretched or that they foresee challenges ahead.

What This Means for Investors Based on the GF Value™ assessment, DigitalOcean Holdings Inc DOCN is currently overvalued. With a current price significantly exceeding the estimated fair value, potential investors may want to exercise caution. The high P/E ratio and substantial insider selling further reinforce the concerns regarding the stock's valuation, indicating a potential risk for those considering an investment at this time.

For the complete analysis, visit the DigitalOcean Holdings Inc DOCN stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is DOCN's GF Score™?

DOCN has a GF Score™ of 75/100, suggesting that it is above average in terms of quality and performance potential.

Is DOCN overvalued or undervalued?

DOCN is currently overvalued, with a significant discrepancy between its market price and the GF Value™ of $44.49.

What is DOCN's P/E ratio?

DOCN's P/E ratio is 68.0x, which is 64% above its 5-year median of 41.6x, indicating that the stock is trading at a premium compared to its historical valuation.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

BROOMFIELD, Colo.--(BUSINESS WIRE)--DigitalOcean Holdings, Inc. (NYSE: DOCN), the AI-Native Cloud, purpose-built for inference and agentic workloads, today announced that Chief Executive Officer Paddy Srinivasan and Chief Financial Officer Matt Steinfort will participate in a fireside chat at JP Morgan's Global Technology, Media and Communications Conference on Tuesday May, 19 at 11:15 a.m. (PT) / 2:15 p.m. (ET). A live webcast will be available at https://jpmorgan.metameetings.net/events/tmc26.

DigitalOcean Holdings, Inc. (DOCN) Presents at J.P. Morgan 54th Annual Global Technology, Media and Communications Conference Transcript

DigitalOcean (NYSE: DOCN) today announced that Hippocratic AI's Polaris system has reached 10 million patient calls at a 99.9% clinical safety score, running on NVIDIA HGX™ B300 GPUs on DigitalOcean's AI-Native Cloud, a five-layer, integrated stack purpose built for production AI. This milestone is the result of DigitalOcean engineering its inference platform for the latency, reliability, and concurrency demands of safety-critical healthcare workloads, delivering 2× prefill speedup and ~30% higher per-node throughput, developed in close collaboration with both NVIDIA and Hippocratic AI. The results demonstrate why an increasing number of production AI workloads are choosing DigitalOcean's AI-Native Cloud as the purpose-built home for inference at scale.

Hippocratic AI's Polaris system has reported a 99.9% clinical safety score and an average patient rating of 8.95 out of 10 across more than 10 million real patient calls, supported by human evaluation involving more than 7,500 clinical staff. With more than 180 million patient interactions to date across chronic disease management, medication adherence, care gap closure, and clinical scheduling, Hippocratic AI is operating at a scale where the line between infrastructure performance and patient safety disappears.

"Polaris is built for the realities of clinical care: long sessions, real human conversations, zero room for error. With DigitalOcean and NVIDIA, we have early access to NVIDIA HGX™ B300 and the optimization techniques it unlocks, including NVFP4 quantization,” said Debajyoti Datta, Co-Founder, Hippocratic AI. “That is what allows us to hold a 400-millisecond time-to-first-token at production scale, on the clinical conversations our patients depend on."

Engineered to Support Safety-Critical Inference

Production healthcare AI breaks the assumptions most inference stacks are built on. Sessions are long. Tokens are time-sensitive. A dropped connection in the middle of a care plan retrieval is not a UX bug. It is a clinical interruption. Meeting that bar requires deep platform engineering and reliability at scale, the kind that off-the-shelf GPU access cannot provide and that only a purpose-built inference cloud can deliver.

Over the past year, the engineering teams at DigitalOcean worked in close collaboration with Hippocratic AI to optimize every layer of the inference stack. DigitalOcean engineered its AI-Native Cloud with hardware-aware scheduling, optimized inference runtimes, and platform-level scaling tuned for sustained high-concurrency workloads. Hippocratic AI's model team contributed proprietary inference work, including FP8 and NVFP4 quantization, KV-cache optimization, custom MoE kernels, and a cache-aware routing architecture that maximizes KV-cache hit rate and context reuse across long-horizon clinical sessions. NVIDIA provided early access to next-generation HGX™ B300 hardware, alongside engineering collaboration on Hopper and Blackwell architecture.

The combined result, on long-context clinical sessions, is approximately 30% higher per-node throughput and a 2× reduction in prefill latency, compared to a prior-generation stateless serving configuration. These gains build on the production efficiency Hippocratic AI announced earlier this month at DigitalOcean Deploy, where the company reported 2× production inference throughput and a 40% reduction in end-to-end P99 latency on the AI-Native Cloud.

"What Hippocratic AI has built in healthcare AI is remarkable, hundreds of millions of real patient interactions across some of the most complex and sensitive moments in people's lives,” said Paddy Srinivasan, Chief Executive Officer, DigitalOcean. “Delivering that at 99.9% clinical safety is what production AI looks like when it matters most. This is what purpose-built inference delivers, and it's what our AI-Native Cloud makes possible. Hippocratic AI's results are the proof."

Among the First Production Customers on NVIDIA HGX™ B300

Having Hippocratic AI among the first production customers on NVIDIA HGX™ B300 GPUs, made available through DigitalOcean's early work with NVIDIA, means DigitalOcean is validating its inference platform against one of the most demanding real-world workloads, not synthetic benchmarks. For workloads where every token affects clinical experience, Blackwell Ultra unlocks a step-change in capacity per node, allowing Hippocratic AI to support more concurrent sessions at the same latency targets and to extend context windows on long-horizon clinical conversations.

"The demands of safety-critical AI workloads are fundamentally different from consumer applications,” said Dave Salvator, Director of Accelerated Computing Products, NVIDIA. “DigitalOcean and Hippocratic AI are demonstrating how tightly integrated infrastructure and inference optimization, built on NVIDIA Hopper and Blackwell architecture, can deliver both performance and reliability at scale."

A Different Bar for Healthcare AI Infrastructure

The infrastructure requirements of safety-critical AI are not the requirements of consumer or enterprise AI scaled up. They are different in kind. Latency translates directly into clinical workflow quality. Reliability is measured in successful patient interactions, not nine-fives uptime. Cost efficiency determines whether a healthcare AI workload can scale to serve a population, not just a pilot.

In healthcare AI, infrastructure is not just about performance. It is foundational to patient safety. The Hippocratic AI deployment on the DigitalOcean AI-Native Cloud reflects this shift, and the platform engineering behind it shows what production AI looks like when infrastructure, model optimization, and hardware are designed together for outcomes that matter.

Read the full customer case study, including a video interview with Hippocratic AI Co-Founder Debajyoti Datta, at digitalocean.com/customers/hippocratic-ai.

About DigitalOcean

DigitalOcean is the AI-Native Cloud purpose-built for the inference and agentic era. Its five-layer integrated platform - spanning infrastructure, core cloud, inference, data, and managed agents - is open throughout with no vendor lock-in, giving builders everything they need to start fast, scale production AI workloads, and improve unit economics. More than 650,000 customers globally trust DigitalOcean to build, ship, and scale their applications. Learn more at digitalocean.com.

About Hippocratic AI

Hippocratic AI has developed the safest generative AI Agents for healthcare. The company believes that generative AI has the ability to bring healthcare abundance to every person in the world. The company focuses on building non-diagnostic patient-facing clinical AI agents and does not allow its agents to be used to prescribe or diagnose. Hippocratic AI has received a total of $404 million in funding and is backed by leading investors, including Andreessen Horowitz, General Catalyst, Kleiner Perkins, Avenir, NVIDIA's NVentures, Premji Invest, SV Angel, Google’s CapitalG, and numerous health systems. Learn more at https://hippocraticai.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260527711308/en/

DigitalOcean Holdings, Inc. (DOCN) Presents at Bank of America 2026 Global Technology Conference Transcript

BROOMFIELD, Colo.--(BUSINESS WIRE)--DigitalOcean (NYSE: DOCN), the AI-Native Cloud purpose-built for inference and agentic workloads, today announced three additions to its executive leadership team: Kevin Van Gundy as Chief Revenue Officer, Leo Leung as Chief Marketing Officer, and Brady Mickelsen as Chief Legal & Administrative Officer. The appointments come weeks after DigitalOcean unveiled its AI-Native Cloud at Deploy, the company's developer and customer conference, and positioned the.