DOCN Should I Buy
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DigitalOcean Holdings Inc (DOCN) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company's strong financial performance, positive analyst ratings, and growth potential in the AI market make it a compelling choice for long-term growth.
The technical indicators suggest a bullish trend. The MACD is positive and contracting, the RSI is neutral at 65.875, and moving averages are bullish (SMA_5 > SMA_20 > SMA_200). The stock is trading above the pivot level of 60.488, with resistance at 65.324 and 68.312, and support at 55.652 and 52.664.
Analysts have upgraded the stock with increased price targets, citing strong positioning in the AI market and profitable growth potential.
The company is projected to report $900 million in revenue for 2025, reflecting a 15% YoY increase.
Strong financials with a 380.65% YoY increase in net income and an EBITDA profit margin of 40%.
The company has a net dollar retention rate of 99%, indicating strong customer loyalty.
The broader market (S&P
is down by 1.54%, which could indicate general market weakness.
No recent congress trading data or significant hedge fund or insider activity to support a strong buy signal.
In Q3 2025, DigitalOcean reported a 15.69% YoY revenue increase to $229.63 million, a 380.65% YoY increase in net income to $158.37 million, and a 368.75% YoY increase in EPS to 1.5. Gross margin also improved to 59.63%, up 1.53% YoY.
Analysts are bullish on the stock. Cantor Fitzgerald upgraded the stock to Overweight with a price target of $68, citing profitable growth and scaling potential. BofA raised its price target to $72, highlighting the company's positioning in the AI market. Piper Sandler raised its price target to $50 but remains Neutral, citing limited visibility despite positive momentum.
