What Happened?
Shares of cloud computing platform DigitalOcean (NYSE:DOCN) jumped 5.6% in the morning session after the company announced a significant expansion of its Artificial Intelligence (AI) offerings and new product updates at its Deploy London conference.
The announcements included the launch of a new AI Partner Program and a broader AI Ecosystem. These efforts aimed to bring together technology innovators and AI-focused startups to help build the next wave of AI applications. The company also revealed several product updates across its portfolio, including the addition of powerful new graphics processing units (GPUs) from NVIDIA and AMD to its infrastructure. Furthermore, DigitalOcean showcased improvements to its Gradient AI Platform, with new features for image generation and more secure enterprise deployments.
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What Is The Market Telling Us
DigitalOcean’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 21% on the news that the company reported strong fourth-quarter 2024 results, surpassing analysts' expectations for revenue, EPS, and EBITDA. Revenue grew 13% y/y, driven by a sharp rise in spending from its top-tier customers, whose contribution to overall revenue jumped 37%. Additionally, full-year EPS guidance came in above Wall Street estimates. Overall, we think this was still a solid quarter with some key areas of upside.
DigitalOcean is up 10.9% since the beginning of the year, but at $38 per share, it is still trading 18.6% below its 52-week high of $46.69 from February 2025. Investors who bought $1,000 worth of DigitalOcean’s shares at the IPO in March 2021 would now be looking at an investment worth $894.12.
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