DOCN
DigitalOcean Holdings, Inc.

DigitalOcean Holdings, Inc.DOCN

Technology · Software - Infrastructure
72.48USD
+2.52%
Nov 08, 2026
DOCN overview ready
AI Cloud Infrastructure Provider for Digital-Native Enterprises
DigitalOcean is a customer-facing AI cloud infrastructure provider rather than a powered-land owner or wholesale GPU lessor.
Primary theme is lagging
AI Infrastructure is lagging (-29.6pp vs SPY over 21 sessions; 0 of 16 members ahead of SPY).
Price trend is broken
Longer-term context reads trend under pressure, with a near-term setup of distribution pressure.
The tactical setup reads distribution pressure, but the weekly structure is broken.
Fair valuation
The price broadly reflects the strength of its balance sheet, with upside and risk reasonably balanced.
Unremarkable fundamentals
Primary risk
Intense competition in cloud infrastructure market.
Market Nov 6Filing Sep 30Price action Nov 7Research Oct 2

Conviction Level

PriceAction1.4BusinessPerformance5.0BusinessQuality6.7Valuation4.8ThemeMomentum1.0Mixed — Revenue growth has accelerated across 4 consecutive quarters, rising from +18% to +40% year over year. Earnings turned negative: a diluted loss of -$0.37 against EPS of $1.51 a year earlier. — From filed financial statements. Describes the recent trajectory of the business, not the stock. 20 of the 100 Conviction points.

Conviction uses Price Action, Business Performance, Business Quality, Valuation. Theme Momentum is research context, not an input.

Theme momentumPrimary theme · group context, not entry timing
vs SPY
−29.6pp
Theme return
−34.5%
Beating SPY
0 of 16
21 sessions to Nov 6, 2026 · Theme Leadership V2
Price
Loading price history…

Price Action

Price trend is broken
Longer-term context reads trend under pressure, with a near-term setup of distribution pressure.
The tactical setup reads distribution pressure, but the weekly structure is broken.
EntryDamaged / breakdown

The technical structure itself is broken across timeframes — the weakest entry profile.

Key Financials

Market Cap
$8.6B
Avg Volume (60D)
3.3M
60 sessions
Revenue Growth YoY
+15.5%
FY2025 vs FY2024
Gross Margin
+54.7%
Trailing twelve months
Operating Margin
+12.5%
Trailing twelve months
Free Cash Flow Yield
+2.9%
Distance from 200DMA
-35.4%
P/E
249.6x
EV / EBITDA
23.9x
EV / Sales
7.6x
Market metrics as of Nov 6, 2026
Financial results for the period ended Sep 30, 2026
Filed balance-sheet data as of Sep 30, 2026

Business Performance

Mixed

Revenue growth has accelerated across 4 consecutive quarters, rising from +18% to +40% year over year. Earnings turned negative: a diluted loss of -$0.37 against EPS of $1.51 a year earlier.

Latest reported: Q3 FY2026, ended Sep 30
Revenue growthAccelerating
+40%
$321M in Q3 FY2026 · YoY
YoY growth, last 4 quarters
  1. +18%
  2. +22%
  3. +29%
  4. +40%
Earnings growthTurned to a loss
-$0.37
Diluted EPS -$0.37 vs $1.51 a year earlier · GAAP
Diluted EPS YoY (GAAP), last 4 quarters
  1. +26%
  2. -62%
  3. -26%
  4. n/a
Operating marginContracting
10.3%
-9.3 pp YoY · gross margin 50.1% (-9.5 pp)
The share count is rising

Business Quality

6.7 / 10

How well the business earns on its assets, converts earnings to cash and funds itself — read from its SEC filings.

Fundamentals & Valuation

Two of the three valuation perspectives say fair; peers is the dissenting view.
DigitalOcean Holdings, Inc. has a Fair valuation stance because the price broadly reflects the strength of its balance sheet, with upside and risk reasonably balanced.

What changed

Company Research

Thesis
DigitalOcean is a customer-facing AI cloud infrastructure provider rather than a powered-land owner or wholesale GPU lessor. It packages GPU and CPU compute, core cloud services, inference capabilities, data services, and agent orchestration for digital-native and AI-native customers deploying production workloads.
Opportunity
High opportunity
Cloud-platform and data-center capacity expansion that supplies GPU- and CPU-backed infrastructure for production AI inference, agentic applications, and related cloud workloads.
Key risk
Intense competition in cloud infrastructure market.

Economic classification

Loading the economic classification…

Business & Markets

Technology · Software - Infrastructure
What they do

DigitalOcean Holdings, Inc. operates a cloud platform that provides infrastructure and AI compute services to technology companies globally, enabling them to build, run, and scale intelligent applications.

How it earns

The company generates revenue primarily through subscription-based infrastructure-as-a-service offerings.

Products & services
Compute instances
Storage solutions
Networking products including cloud firewalls and managed load balancers
Virtual private cloud software
IP address and domain name system management
Customers & end markets
Digital-native technology companies
AI-native enterprises
Market position

Customer-facing AI cloud infrastructure provider positioned as a niche player focused on digital-native and AI-native customers.

Demand drivers
Medium cyclicality

Demand for cloud infrastructure is influenced by technology adoption cycles and enterprise IT spending patterns.