DigitalOcean Holdings, Inc., through its subsidiaries, operates an agentic inference cloud platform in North America, Europe, Asia, and internationally. The company provides AI and Digital Native Enterprises build, run, and scale intelligent applications for growing technology companies. It also offers infrastructure-as-a-service (IaaS) solutions comprising compute, storage, and networking products, including cloud firewalls, managed load balancers, NAT gateways, and virtual private cloud software, as well as IP address management and domain name system management. In addition, the company provides platform-as-a-service (PaaS) and software-as-a-service (SaaS) solutions, such as managed databases; managed Kubernetes and container registry; application platform to build, deploy, and scale applications; Functions, a serverless compute solution; and Uptime for real-time uptime and latency alerts, as well as managed hosting and DigitalOcean Marketplace, a platform where developers can find pre-configured applications and solutions. Further, it offers artificial intelligence (AI)/machine learning (ML) applications comprising GPU droplets; bare metal GPUS, which provides access to a GPU server without any virtualization layer and gives developers with customizable server for their use case; and Jupyter Notebooks that provides cloud workspace and managed interactive development environment for exploring data and training, and building machine learning models. Its customers use its platform in various industry verticals, such as online gaming, fintech, and cybersecurity, as well as for a range of use cases, including building and hosting websites, web and mobile applications development, AI integration, and building AI products and applications. DigitalOcean Holdings, Inc. was incorporated in 2012 and is headquartered in Broomfield, Colorado.
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DigitalOcean's Cloudways Launches Managed AI Agents Product Line
DigitalOcean Holdings subsidiary Cloudways has launched a Managed AI Agents product line featuring OpenClaw and Hermes, designed to simplify deployment and management of AI agents for businesses and developers. The new offering expands DigitalOcean's cloud tools aimed at making AI application workflows more accessible, and ties AI agent usage directly into its existing cloud and inference services. The company operates an agentic inference cloud platform across North America, Europe, Asia, and other regions, serving small and mid-sized customers. Investors will watch whether AI-related revenue helps DigitalOcean hit its 2026 revenue guidance of US$1.17 billion to US$1.18 billion and its third quarter target of US$304 million to US$307 million.
Cloudways Launches Managed AI Agents for Banned OpenClaw Framework
Cloudways, part of DigitalOcean Holdings, launched Managed AI Agents on August 17, offering enterprise hosting for the OpenClaw and Hermes frameworks that were banned by major hyperscalers after a February 2026 incident. The platform adds isolated environments, runtime update validation, and one-click Model Context Protocol integration to mitigate risks identified by Kaspersky, including 530 vulnerabilities and 1.5 million leaked API tokens. Pricing ranges from a $4.99 promotional rate to $79.99 per month, with customers bringing their own LLM keys. The launch positions Cloudways as a trust layer for deploying volatile open-source agents in production.
DigitalOcean Q2 Earnings Call: Five Key Analyst Questions
DigitalOcean reported second quarter results that beat analyst estimates, with revenue of $281.2 million, up 28.6% year-over-year, and adjusted EPS of $0.45 versus the $0.26 consensus. The company raised its full-year revenue guidance to $1.18 billion at the midpoint from $1.14 billion, and lifted its full-year adjusted EPS guidance to $1.38 at the midpoint, a 19.6% increase. During the earnings call, analysts from Goldman Sachs, William Blair, Citi, Bank of America, and Morgan Stanley questioned management on scaling for larger customers, the impact of recent price increases, adoption of additional platform layers, the 2027 growth outlook, and drivers of revenue per megawatt. CEO Padmanabhan Srinivasan highlighted that inference services grew nearly 800% year-over-year and that most major AI customers are already integrating core cloud services beyond inference. CFO Matt Steinfort noted that the impact of price increases on Q2 revenue was modest and that new pricing is already reflected in forward guidance.
DigitalOcean Stock Surges 275% in a Year as AI-Native Cloud Platform Drives Record Revenue
DigitalOcean stock has soared 275% over the past 12 months, far outpacing cloud giants Amazon, Microsoft, and Alphabet, as its new AI-Native Cloud platform fuels surging demand from small and midsized businesses. The company reported record second-quarter revenue of $281.2 million, up 29% year-over-year, with annual recurring revenue reaching $1.1 billion, of which AI customers contributed $234 million—a 212% increase. Remaining performance obligations hit $894 million, a twelvefold jump from the prior year, signaling a large backlog of customers awaiting data center capacity. Management forecasts over 50% total revenue growth for 2027, and the stock trades at a forward price-to-sales ratio of 7.2 based on that guidance, below its historical average.
DigitalOcean Raises 2026 Revenue Outlook to $1.18 Billion on AI Cloud Demand
DigitalOcean Holdings raised its full-year 2026 revenue guidance to between $1.17 billion and $1.18 billion, citing growing AI workloads and broader cloud adoption. The company reported second-quarter 2026 revenue of $281.18 million, while net income eased slightly to $35.44 million and it booked a $311,000 impairment on certain long-lived assets. Management also issued third-quarter 2026 revenue guidance of $304 million to $307 million. The raised outlook reinforces the near-term AI and cloud-demand catalyst, though the slight dip in profitability keeps margin pressure and capital intensity as key risks.
McDonald's, Caterpillar, Palantir lead premarket moves on earnings beats
Several major companies saw significant premarket stock moves following their latest quarterly earnings reports. McDonald's gained 1.9% after posting adjusted earnings of $3.38 per share, beating the LSEG consensus of $3.32, though revenue of $7.1 billion missed the expected $7.13 billion. Caterpillar climbed 8% after reporting adjusted earnings of $8.17 per share on revenue of $20.54 billion, both exceeding analyst expectations of $6.20 per share and $19.34 billion. Palantir Technologies surged 15% on second-quarter results driven by a nearly 150% jump in U.S. commercial revenue. Merck rose more than 1% after losing an adjusted 13 cents per share on revenue of $16.61 billion, better than the anticipated loss of 27 cents per share on $16.36 billion, and raised its full-year revenue guidance. Pfizer gained after beating estimates with adjusted earnings of 77 cents per share on revenue of $15.03 billion and increasing the low end of its full-year revenue outlook. On Semiconductor jumped 7% on better-than-expected second-quarter results and margins. Snap rose 5% after revenue of $1.6 billion topped the $1.54 billion estimate, with global daily active users and average revenue per user also exceeding expectations. Whirlpool was little changed after a larger-than-expected adjusted loss of 21 cents per share and a lowered full-year earnings forecast. Wayfair fell 4% despite beating estimates with earnings of 95 cents per share on revenue of $3.52 billion. DigitalOcean plunged 11% even though second-quarter earnings of 45 cents per share on revenue of $281 million surpassed analyst expectations.
DigitalOcean Stock Surges 360% in 12 Months Ahead of Key August 4 Earnings Report
DigitalOcean stock has surged 360% over the past 12 months as the company rapidly builds AI data centers to meet soaring demand from small and medium-sized businesses. The company recently launched its AI-Native Cloud platform, which includes 20 data centers with chips from Nvidia and Advanced Micro Devices, and on July 7 it reported ending the second quarter with $800 million in remaining performance obligations, a tenfold increase from a year earlier. DigitalOcean will release its full second-quarter operating results on August 4, and management has indicated it plans to raise its 2027 revenue growth forecast above the prior 50% target. The stock currently trades at a price-to-sales ratio of 15.4, above its long-term average of 8.5, but based on the 2027 guidance its forward price-to-sales ratio is 8.1, and a higher forecast could make the stock appear cheaper for medium-term investors.
DigitalOcean Rose on Strong Execution and Improving Growth Expectations
DigitalOcean Holdings shares outperformed during the second quarter of 2026 as investors responded favorably to strong company execution and improving growth expectations. Polen Capital’s Polen 5Perspectives Small-Mid Growth Strategy highlighted the cloud infrastructure provider in its Q2 2026 investor letter, noting increasing confidence in its ability to benefit from broader demand for cloud infrastructure and AI-related workloads. DigitalOcean reported first-quarter 2026 revenue of $258 million, a 22% year-over-year increase, and its stock closed at $136.45 per share on July 21, 2026, with a market capitalization of $14.24 billion. The number of hedge funds holding the stock rose to 47 at the end of the first quarter from 31 in the previous quarter.
Alger Weatherbie Fund Says DigitalOcean Benefits From AI Demand Cycle
Alger Weatherbie Specialized Growth Fund highlighted DigitalOcean Holdings as a contributor to performance in the second quarter of 2026, citing strong operating results and raised revenue guidance. The fund noted that DigitalOcean, a cloud infrastructure provider, is increasingly positioning itself for inference and agentic AI workloads and is benefiting from early-stage demand. DigitalOcean shares gained 313.79% over the past 52 weeks, closing at $119.09 on July 20, 2026, with a market capitalization of $13.92 billion, though the stock posted a one-month return of negative 24.23%. The company reported first-quarter 2026 revenue of $258 million, up 22% year-over-year, and hedge fund ownership rose to 47 portfolios from 31 in the prior quarter.
DigitalOcean Holdings Could Be 29% Undervalued on 2026 Revenue Growth Guidance
DigitalOcean Holdings recently issued second-quarter 2026 earnings guidance projecting approximately 29% year-over-year revenue growth, drawing fresh attention to its valuation. The most followed narrative suggests the stock is 29.4% undervalued, with a fair value estimate of $178.77 compared to the last close of $126.30, based on assumptions of faster top-line growth and improving profitability. A separate Simply Wall St DCF model points to a fair value of $253.93, though the market price-to-earnings ratio of 55.7 times sits well above the estimated fair ratio of 32.2 times and the US IT industry average of 18.4 times, signaling potential valuation risk if expectations cool. The stock has posted a 62.53% 90-day return and a very large one-year total shareholder return, but is down 25.90% over the past 30 days.
DigitalOcean and Datadog Post Eight Straight Quarters of Revenue Growth
DigitalOcean and Datadog have each recorded eight consecutive quarters of sequential revenue growth, according to company filings. DigitalOcean’s quarterly revenue rose from $192.5 million in Q2 2024 to $257.9 million in Q1 2026, while Datadog’s climbed from $645.3 million to $1.0 billion over the same period. Datadog’s Q1 2026 revenue represented a 32% year-over-year jump, and DigitalOcean expects its Q2 2026 sales growth to accelerate to 29% year over year. Both companies recently introduced new capabilities, with DigitalOcean launching an inference engine for agentic workloads and Datadog adding hardware tracking features.
Lazard, Cloudflare, DigitalOcean, Sonos, and Carnival make big moves this week
Several stocks made notable moves this week. Lazard rose 4.4% on Thursday after being named financial advisor to Warburg Pincus on a $3.6 billion private equity transaction. Cloudflare gained 6% on Tuesday following a Scotiabank upgrade to Sector Outperform and a price target increase to $300 from $225. DigitalOcean climbed 7% on Tuesday after pre-announcing record preliminary second-quarter 2026 results, with remaining performance obligations expected to top $800 million, more than ten times higher than a year earlier. Sonos advanced 2.5% on Tuesday after renewing an exclusive sales representative agreement with AdsWizz for its audio advertising inventory across Europe. Carnival rose 5.3% on Thursday after its board declared a quarterly dividend of $0.15 per share.
GoDaddy, Freshworks, and HubSpot Shares Surge as Investors Rotate into Software Stocks
Shares of GoDaddy, Freshworks, and HubSpot jumped in afternoon trading as investors rotated out of high-flying semiconductor stocks into beaten-down software names. GoDaddy rose 5.6%, Freshworks gained 4.5%, and HubSpot climbed 5.8%. The broader software sector was lifted by DigitalOcean's blowout preliminary results, which showed remaining performance obligations exceeding $800 million, more than ten times year-over-year, driven by multiple new nine-figure AI inference contracts. The iShares software ETF IGV climbed roughly 7% over eight sessions, while the semiconductor SOXX fell about 8.5%. HubSpot remains down 46.4% year-to-date and is trading 63.5% below its 52-week high of $560.90 from July 2025.
Atlassian and Intuit Shares Jump as Investors Rotate into Software Stocks
Atlassian and Intuit shares rose sharply in afternoon trading as investors rotated out of high-flying semiconductor stocks into beaten-down software names. Atlassian gained 3.8% and Intuit climbed 3.6%, while the iShares software ETF IGV advanced roughly 7% over eight sessions even as the semiconductor SOXX index fell about 8.5%. The rotation was fueled by DigitalOcean's blowout preliminary results, which showed remaining performance obligations exceeding $800 million, more than 10 times year-over-year, driven by multiple new nine-figure AI inference contracts. Microsoft also rose about 3% on the week after launching its $2.5 billion Frontier AI-services unit, and ServiceNow and Salesforce each gained around 4%.
Workday and Twilio Shares Jump as Investors Rotate Into Software Stocks
Workday and Twilio shares rose sharply in afternoon trading as investors rotated out of semiconductor stocks into beaten-down software names. Workday gained 4% and Twilio climbed 3.4%, while the iShares software ETF IGV rose roughly 7% over eight sessions even as the semiconductor SOXX fell about 8.5%. The rotation was supported by DigitalOcean's blowout preliminary results, which showed remaining performance obligations exceeding $800 million, more than ten times year-over-year, driven by multiple new nine-figure AI inference contracts. Revenue growth was guided to accelerate to approximately 29%, and margins to the high end, providing hard evidence that AI spend is converting into durable contracted backlog. The broader software group also got a lift from a recent upgrade of Salesforce and ServiceNow by Guggenheim analyst John DiFucci, who argued that AI-disruption fears had pushed valuations too low.
ServiceNow Shares Rise 3.4% as Investors Rotate into Software Stocks
ServiceNow shares rose 3.4% in afternoon trading as investors continued rotating out of high-flying semiconductor stocks into beaten-down software names. The iShares software ETF climbed roughly 7% over eight sessions while the semiconductor SOXX fell about 8.5%, with ServiceNow and Salesforce each gaining around 4%. The rotation was supported by DigitalOcean's blowout preliminary results, which showed remaining performance obligations exceeding $800 million, more than 10 times year-over-year, driven by multiple new nine-figure AI inference contracts. ServiceNow shares later cooled to $110.48, up 2.4% from the previous close, and remain 46.6% below their 52-week high of $207.00 from July 2025.
DigitalOcean Joins Russell 1000 Index in FTSE Russell Reconstitution
DigitalOcean Holdings has been added to the Russell 1000 Index as part of the latest FTSE Russell reconstitution. The promotion places the company into a broader set of large-cap benchmarks tracked by many institutional investors. DigitalOcean's shares most recently closed at $157.03, with the stock posting a 220.7% year-to-date return and a 297.0% gain over three years. Index inclusion may bring increased attention from index-tracking and benchmark-aware funds, potentially altering trading volumes and liquidity patterns.
Wall Street’s Favorite Stocks: DigitalOcean and Ross Stores Shine, MongoDB Lags
Wall Street analysts have set ambitious price targets for MongoDB, DigitalOcean, and Ross Stores, but StockStory urges caution on MongoDB while highlighting DigitalOcean and Ross Stores as more promising. MongoDB’s consensus target of $394.68 implies a 17.5% return, yet its complex enterprise implementation and forecasted 4-percentage-point decline in free cash flow margin raise concerns. DigitalOcean, with a $178.77 target and 17.7% implied return, benefits from 17.6% average billings growth and an expected 30.7% sales acceleration. Ross Stores, trading at $208.83 with a $256.18 target and 22.7% implied return, has posted 5.4% average same-store sales growth and strong returns on capital.
DigitalOcean Stock Surges 184% in 2026 on AI Cloud Demand, Guidance Raised
DigitalOcean shares have skyrocketed 184% in 2026, far outpacing cloud rivals Amazon, Microsoft, and Alphabet, as its AI-focused cloud platform tailored for small and medium businesses drives accelerating growth. The company reported a 221% year-over-year jump in AI annual recurring revenue to $170 million in the first quarter, with inference services ARR soaring 487% and accounting for 64% of AI ARR. DigitalOcean now expects revenue to rise 26% in 2026 and more than 50% in 2027, a substantial upgrade from prior forecasts. The stock trades at nearly 16 times sales, but analysts see further upside, with a potential market cap of $35 billion by 2030 if growth continues, implying 141% gains from current levels.
Domo and DigitalOcean Shares Fall Amid Broader Software Selloff
Shares of Domo and DigitalOcean declined sharply in afternoon trading as a broader selloff hit the software sector, driven by fears that artificial intelligence agents will erode traditional subscription-based enterprise software models. Domo fell 6.4 percent and DigitalOcean dropped 5.3 percent, while larger peers like Salesforce and Adobe have seen year-to-date declines of roughly 43 percent and 49 percent respectively. The selloff was triggered by high-profile AI talent departures from Alphabet and a regulatory overhang, compounded by Accenture's near-20 percent single-day drop the previous week after it cut its growth outlook and cited AI compressing demand for traditional IT services. Domo's decline adds to a 72.1 percent year-to-date loss, with the stock trading at $2.32 per share, 87.3 percent below its 52-week high, following recent disclosures of a covenant breach and advanced negotiations for a potential sale of the company.