DigitalOcean's AI Revenue Doubles for Five Quarters, Stock Up 41%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 9h ago
0mins
Source: Fool
- AI Revenue Surge: DigitalOcean's AI business has doubled its revenue for five consecutive quarters, driving total revenue to $659 million in the first three quarters of 2025, reflecting a 14.5% year-over-year increase and highlighting strong demand and growth potential in the SMB market.
- Significant Profit Increase: The company's net income reached $233.6 million in the first three quarters of 2025, a staggering 252% increase year-over-year, attributed to accelerating revenue growth and strict cost control, indicating a notable improvement in operational efficiency.
- Analyst Optimism: According to The Wall Street Journal, 8 out of 15 analysts covering DigitalOcean have assigned a buy rating, demonstrating market confidence in its future growth, particularly as its AI business continues to perform strongly.
- Stock Appears Cheap: Despite a rapid stock price increase over the past year, currently trading above the analysts' average price target of $54.33, DigitalOcean's price-to-sales ratio of 6.4 remains below its average of 8.1 since going public, suggesting the stock still holds attractive value.
Analyst Views on DOCN
Wall Street analysts forecast DOCN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DOCN is 54.50 USD with a low forecast of 47.00 USD and a high forecast of 60.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
9 Buy
3 Hold
0 Sell
Strong Buy
Current: 52.880
Low
47.00
Averages
54.50
High
60.00
Current: 52.880
Low
47.00
Averages
54.50
High
60.00
About DOCN
DigitalOcean Holdings, Inc. provides the simplest scalable cloud platform that democratizes cloud and AI for growing tech companies around the world. It provides a cloud computing platform, offering simple, scalable and approachable on-demand infrastructure and platform services for developers at growing technology companies. Its platform simplifies cloud computing, enabling its customers to rapidly accelerate innovation and productivity. The simplicity of its platform allows users to focus on building and scaling their business instead of on managing their infrastructure. It offers mission-critical solutions across Infrastructure-as-a-Service (IaaS), including its Droplet virtual machines, storage and networking offerings; Platform-as-a-Service and Software-as-a-Service, including its Managed Hosting, Managed Database, Managed Kubernetes and Marketplace offerings; and artificial intelligence and machine learning, including its GPU Droplets, Notebooks and GenAI Platform offerings.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
