Glenview Capital Management Acquires Stake in DigitalOcean Holdings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy DOCN?
Source: Fool
- New Investment Position: Glenview Capital Management initiated a new position in DigitalOcean Holdings during Q4 2025, acquiring 2,004,299 shares valued at approximately $96.45 million, indicating confidence in the cloud computing market.
- Significant Position Value: As of December 31, 2025, Glenview's position in DigitalOcean was valued at $96.45 million, representing 1.96% of its 13F reportable assets, making it the fund's 11th largest holding and reflecting a strong commitment to the company.
- Strong Performance Growth: DigitalOcean reported an 18% annual revenue growth, with annual recurring revenue (ARR) from $1 million customers surging by 123%, highlighting robust performance and demand in the cloud computing sector.
- Future Growth Potential: Although the company is adding 31 megawatts of new data center capacity, which may temporarily impact profitability, management expects sales to grow by 25% in 2026, indicating strong long-term growth potential.
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Analyst Views on DOCN
Wall Street analysts forecast DOCN stock price to rise
5 Analyst Rating
4 Buy
1 Hold
0 Sell
Strong Buy
Current: 54.260
Low
50.00
Averages
63.60
High
72.00
Current: 54.260
Low
50.00
Averages
63.60
High
72.00
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.
DigitalOcean's AI Revenue Soars 150% Year Over Year
- Significant AI Growth: DigitalOcean's annual run-rate revenue for its AI business reached $120 million in Q4 2025, soaring 150% year-over-year, indicating strong demand for AI services and reinforcing its leadership in the SMB market.
- Revenue Continues to Rise: The company's annual recurring revenue (ARR) hit $970 million at the end of 2025, an 18% increase from the previous year, marking the second consecutive quarter of accelerating growth, which highlights the effectiveness of its business model and rising market demand.
- Market Valuation Advantage: Despite a 68% increase in DigitalOcean's stock price over the past year, its price-to-sales (P/S) ratio stands at just 7.3, below the average of 8.1 since its IPO in 2021, suggesting that the stock still holds investment value, especially with anticipated revenue acceleration in the next two years.
- Improved Profitability: In 2025, DigitalOcean reported a GAAP net income of $259.3 million, a staggering 207% increase from the previous year, and even after excluding one-time tax benefits, adjusted net income grew by 13% to $223.2 million, reflecting a significant enhancement in its profitability.
See More
DigitalOcean Empowers SMBs in AI Development
- Unique Market Positioning: DigitalOcean focuses on small and medium-sized businesses (SMBs) by offering personalized services and transparent pricing, establishing a unique position in the cloud computing market, especially as larger providers often overlook this segment.
- Rapid Growth in AI Services: By the end of Q4 2025, DigitalOcean achieved $970 million in annual recurring revenue (ARR), an 18% year-over-year increase, with AI products contributing $120 million in ARR, reflecting a staggering 150% growth, indicating strong demand for AI services.
- Significant Profitability Improvement: In 2025, DigitalOcean reported a GAAP net income of $259.3 million, a remarkable 207% increase, and even after excluding one-time tax benefits, adjusted net income grew by 13% to $223.2 million, showcasing robust profitability.
- Attractive Stock Valuation: Despite a 68% rise in stock price over the past year, DigitalOcean's price-to-sales (P/S) ratio stands at just 7.3, below its average of 8.1 since going public, indicating that the stock remains attractive, particularly with anticipated revenue acceleration in the next two years.
See More
DigitalOcean's AI Business Growth Accelerates
- Significant Revenue Growth: DigitalOcean's revenue increased by 15% in 2025 to $901 million, with expectations of 21% growth in 2026 and 30% in 2027, indicating strong growth potential driven by its AI business.
- Surge in AI Customer Revenue: In Q4, DigitalOcean's annual run-rate revenue (ARR) from AI customers soared by 150% year-over-year to $120 million, significantly outpacing the overall ARR growth of 18% to $970 million, highlighting robust demand for its AI solutions.
- Full-Stack Platform Advantage: The full-stack AI platform offered by DigitalOcean, which integrates both hardware and software, propelled a remarkable 254% increase in ARR from AI inference services, enhancing revenue streams and laying a foundation for future profitability.
- Substantial Stock Potential: Although DigitalOcean's stock jumped nearly 6% post-earnings report, it currently trades below $60, with analysts projecting a rise to $109 by 2028, suggesting a potential upside of about 95%, making it an attractive investment opportunity.
See More
DigitalOcean Leverages AI for Rapid Growth
- Significant Revenue Growth: DigitalOcean's revenue reached $901 million in 2025, reflecting a 15% year-over-year increase, with management projecting a 21% growth in 2026 and 30% in 2027, indicating strong market demand and business expansion potential.
- AI Customer Contribution: In the fourth quarter, DigitalOcean's annual run-rate revenue (ARR) from AI-specific customers surged by 150% to $120 million, significantly outpacing the overall ARR growth of 18% to $970 million, showcasing its competitive edge in the AI sector.
- Full-Stack Platform Advantage: The full-stack AI platform offered by DigitalOcean not only allows customers to rent computing capacity but also aids them in building and scaling applications, with AI inference services' ARR skyrocketing by 254%, which will further drive revenue growth and create a stable recurring revenue stream.
- Stock Investment Potential: Although the stock jumped nearly 6% post-earnings report, it currently trades below $60, with analysts predicting a rise to $109 by 2028, suggesting a potential upside of about 95%, making investing in DigitalOcean a smart choice right now.
See More
Glenview Capital Management Acquires Stake in DigitalOcean Holdings
- New Investment Position: Glenview Capital Management initiated a new position in DigitalOcean Holdings during Q4 2025, acquiring 2,004,299 shares valued at approximately $96.45 million, indicating confidence in the cloud computing market.
- Significant Position Value: As of December 31, 2025, Glenview's position in DigitalOcean was valued at $96.45 million, representing 1.96% of its 13F reportable assets, making it the fund's 11th largest holding and reflecting a strong commitment to the company.
- Strong Performance Growth: DigitalOcean reported an 18% annual revenue growth, with annual recurring revenue (ARR) from $1 million customers surging by 123%, highlighting robust performance and demand in the cloud computing sector.
- Future Growth Potential: Although the company is adding 31 megawatts of new data center capacity, which may temporarily impact profitability, management expects sales to grow by 25% in 2026, indicating strong long-term growth potential.
See More
Glenview Acquires Significant Stake in DigitalOcean Holdings
- New Stake Acquisition: Glenview Capital Management initiated a new position in DigitalOcean Holdings by purchasing 2,004,299 shares valued at $96.45 million during Q4 2025, marking it as the fund's 11th largest holding and reflecting confidence in the cloud computing market.
- Asset Management Impact: This acquisition accounts for 1.96% of Glenview's 13F reportable assets, indicating the fund's recognition of DigitalOcean's future growth potential, despite the stock experiencing a roughly 15% decline following its Q4 earnings report.
- Market Performance Analysis: As of February 27, 2026, DigitalOcean's shares were priced at $56.06, representing a 31.3% increase over the past year, with a 14 percentage-point alpha over the S&P 500, showcasing its competitive edge in the cloud computing sector.
- Future Growth Potential: DigitalOcean plans to add 31 megawatts of new data center capacity, which may temporarily impact profitability; however, the CEO stated the company is transitioning to serve larger clients, with expected sales growth of 25% by the end of 2026, providing investors with long-term growth confidence.
See More
DigitalOcean's AI Revenue Soars 150% Year Over Year
- Significant AI Growth: DigitalOcean's annual run-rate revenue for its AI business reached $120 million in Q4 2025, soaring 150% year-over-year, indicating strong demand for AI services and reinforcing its leadership in the SMB market.
- Revenue Continues to Rise: The company's annual recurring revenue (ARR) hit $970 million at the end of 2025, an 18% increase from the previous year, marking the second consecutive quarter of accelerating growth, which highlights the effectiveness of its business model and rising market demand.
- Market Valuation Advantage: Despite a 68% increase in DigitalOcean's stock price over the past year, its price-to-sales (P/S) ratio stands at just 7.3, below the average of 8.1 since its IPO in 2021, suggesting that the stock still holds investment value, especially with anticipated revenue acceleration in the next two years.
- Improved Profitability: In 2025, DigitalOcean reported a GAAP net income of $259.3 million, a staggering 207% increase from the previous year, and even after excluding one-time tax benefits, adjusted net income grew by 13% to $223.2 million, reflecting a significant enhancement in its profitability.
See More
DigitalOcean Empowers SMBs in AI Development
- Unique Market Positioning: DigitalOcean focuses on small and medium-sized businesses (SMBs) by offering personalized services and transparent pricing, establishing a unique position in the cloud computing market, especially as larger providers often overlook this segment.
- Rapid Growth in AI Services: By the end of Q4 2025, DigitalOcean achieved $970 million in annual recurring revenue (ARR), an 18% year-over-year increase, with AI products contributing $120 million in ARR, reflecting a staggering 150% growth, indicating strong demand for AI services.
- Significant Profitability Improvement: In 2025, DigitalOcean reported a GAAP net income of $259.3 million, a remarkable 207% increase, and even after excluding one-time tax benefits, adjusted net income grew by 13% to $223.2 million, showcasing robust profitability.
- Attractive Stock Valuation: Despite a 68% rise in stock price over the past year, DigitalOcean's price-to-sales (P/S) ratio stands at just 7.3, below its average of 8.1 since going public, indicating that the stock remains attractive, particularly with anticipated revenue acceleration in the next two years.
See More
DigitalOcean's AI Business Growth Accelerates
- Significant Revenue Growth: DigitalOcean's revenue increased by 15% in 2025 to $901 million, with expectations of 21% growth in 2026 and 30% in 2027, indicating strong growth potential driven by its AI business.
- Surge in AI Customer Revenue: In Q4, DigitalOcean's annual run-rate revenue (ARR) from AI customers soared by 150% year-over-year to $120 million, significantly outpacing the overall ARR growth of 18% to $970 million, highlighting robust demand for its AI solutions.
- Full-Stack Platform Advantage: The full-stack AI platform offered by DigitalOcean, which integrates both hardware and software, propelled a remarkable 254% increase in ARR from AI inference services, enhancing revenue streams and laying a foundation for future profitability.
- Substantial Stock Potential: Although DigitalOcean's stock jumped nearly 6% post-earnings report, it currently trades below $60, with analysts projecting a rise to $109 by 2028, suggesting a potential upside of about 95%, making it an attractive investment opportunity.
See More
DigitalOcean Leverages AI for Rapid Growth
- Significant Revenue Growth: DigitalOcean's revenue reached $901 million in 2025, reflecting a 15% year-over-year increase, with management projecting a 21% growth in 2026 and 30% in 2027, indicating strong market demand and business expansion potential.
- AI Customer Contribution: In the fourth quarter, DigitalOcean's annual run-rate revenue (ARR) from AI-specific customers surged by 150% to $120 million, significantly outpacing the overall ARR growth of 18% to $970 million, showcasing its competitive edge in the AI sector.
- Full-Stack Platform Advantage: The full-stack AI platform offered by DigitalOcean not only allows customers to rent computing capacity but also aids them in building and scaling applications, with AI inference services' ARR skyrocketing by 254%, which will further drive revenue growth and create a stable recurring revenue stream.
- Stock Investment Potential: Although the stock jumped nearly 6% post-earnings report, it currently trades below $60, with analysts predicting a rise to $109 by 2028, suggesting a potential upside of about 95%, making investing in DigitalOcean a smart choice right now.
See More
Glenview Capital Management Acquires Stake in DigitalOcean Holdings
- New Investment Position: Glenview Capital Management initiated a new position in DigitalOcean Holdings during Q4 2025, acquiring 2,004,299 shares valued at approximately $96.45 million, indicating confidence in the cloud computing market.
- Significant Position Value: As of December 31, 2025, Glenview's position in DigitalOcean was valued at $96.45 million, representing 1.96% of its 13F reportable assets, making it the fund's 11th largest holding and reflecting a strong commitment to the company.
- Strong Performance Growth: DigitalOcean reported an 18% annual revenue growth, with annual recurring revenue (ARR) from $1 million customers surging by 123%, highlighting robust performance and demand in the cloud computing sector.
- Future Growth Potential: Although the company is adding 31 megawatts of new data center capacity, which may temporarily impact profitability, management expects sales to grow by 25% in 2026, indicating strong long-term growth potential.
See More
Glenview Acquires Significant Stake in DigitalOcean Holdings
- New Stake Acquisition: Glenview Capital Management initiated a new position in DigitalOcean Holdings by purchasing 2,004,299 shares valued at $96.45 million during Q4 2025, marking it as the fund's 11th largest holding and reflecting confidence in the cloud computing market.
- Asset Management Impact: This acquisition accounts for 1.96% of Glenview's 13F reportable assets, indicating the fund's recognition of DigitalOcean's future growth potential, despite the stock experiencing a roughly 15% decline following its Q4 earnings report.
- Market Performance Analysis: As of February 27, 2026, DigitalOcean's shares were priced at $56.06, representing a 31.3% increase over the past year, with a 14 percentage-point alpha over the S&P 500, showcasing its competitive edge in the cloud computing sector.
- Future Growth Potential: DigitalOcean plans to add 31 megawatts of new data center capacity, which may temporarily impact profitability; however, the CEO stated the company is transitioning to serve larger clients, with expected sales growth of 25% by the end of 2026, providing investors with long-term growth confidence.
See More
