DigitalOcean Holdings, Inc. research snapshot
DOCN AI stock analysis currently reads DigitalOcean as a higher-quality, reaccelerating AI-native cloud franchise after a strong Q2 2026 pre-announcement. Yahoo Finance showed a $133.89 intraday price on August 3, 2026, up about 12% from the $119.09 prior close, with roughly $15.65 billion of market value at about 116.9 million shares. Q1 2026 revenue was $258 million, up 22% year over year, ARR reached $1.032 billion, and AI customer ARR jumped 221% to $170 million. On July 7, 2026 the company said Q2 revenue growth would accelerate to about 29% with remaining performance obligations above $800 million, and on July 24, 2026 it closed a roughly $472 million convertible note repurchase funded by new shares with no net dilution. The caution is price: at the current quote DOCN still trades near 59x trailing earnings and a high-teens price to sales multiple, so the DOCN AI stock forecast depends on whether accelerated AI demand, capacity utilization, and free cash flow recovery can justify a premium valuation into the August 4, 2026 earnings report.
Current price
$133.89 intraday on August 3, 2026
Market cap
$15.65 billion
AI score
70 / 100
Rating
Reaccelerating AI-native developer cloud with record RPO and raised guidance, but the share price still prices a very long growth and capacity runway
Trend status
Long-term uptrend remains intact above the 200-day average, while the short-term trend is corrective below the 50-day average after a sharp pullback from the 2026 high near $187.50 and a strong pre-earnings bounce
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | DigitalOcean sells an AI-native cloud platform with GPU and CPU infrastructure, core cloud, inference, data, and managed agent orchestration for developers and digital-native companies, with over 650,000 customers. | High |
| Moat | The moat is product simplicity, an integrated five-layer AI-native platform, transparent pricing, and switching costs once apps, data, and managed services sit on the platform. It is real but narrower than the largest hyperscalers. | Medium |
| Management | CEO Paddy Srinivasan has led since February 2024 and is steering an AI-native capacity and larger-customer pivot. The July 2026 convertible repurchase was structured as a share-funded swap with no net dilution, which shows disciplined balance-sheet management. | Medium |
| Financial trend | FY2025 revenue was $901 million, up about 15%, with $259 million of net income. Q1 2026 reaccelerated to 22% growth, and the July 7 pre-announcement guided Q2 revenue growth to about 29% with RPO above $800 million. | High |
| Valuation | At $133.89 intraday on August 3, 2026, DOCN screened near 59x trailing GAAP EPS, about 16.5x trailing revenue, roughly 90x trailing free cash flow, and a forward price to earnings ratio above 100x based on FY2026 non-GAAP EPS guidance. | High |
| Technical trend | Long-term trend remains constructive above the 200-day average, but the short-term setup is corrective below the 50-day average after a pullback from $187.50, with RSI near 42 and a large pre-earnings bounce on August 3. | Medium |
| Risk level | Main risks are extreme valuation after a large rally, AI demand disappointment, capacity utilization miss, free cash flow pressure from data-center build, hyperscaler competition, remaining convertible-note overhang, and sharp moves around the earnings date. | Medium-high |
| AI confidence | Descriptive data confidence is high because the company is public and currently reported. Predictive confidence is only medium because growth, RPO conversion, and cloud multiples can re-rate quickly around earnings. | High data confidence |
| Investment certainty | DOCN looks like a stronger business than the old SMB hosting narrative, but the stock is not a high-certainty bargain unless accelerated growth, capacity utilization, and free cash flow compound fast enough to absorb the current multiple. | Medium |
DOCN AI stock forecast
The DOCN AI stock forecast uses the $133.89 intraday price on August 3, 2026, trailing GAAP diluted EPS near $2.27, company FY2026 non-GAAP EPS guidance of $1.10 to $1.20, and a three-year earnings multiple framework. The Q2 2026 pre-announcement supports revenue growth accelerating to about 29% with RPO above $800 million. An earnings-based scenario model produced a bullish value near $200 to $230, a base value near $90 to $115, and a bearish value near $35 to $50 under stated growth and multiple assumptions. These are scenario ranges, not promises, and the August 4, 2026 earnings report may reset the numbers.
$200 to $230
More likely if Q2 2026 results and full-year guidance confirm revenue growth above 29%, RPO keeps compounding from the $800 million plus base, 2026 to 2027 capacity ramps as management has outlined, free cash flow margins recover after capacity start-up costs, and investors keep paying a premium multiple on growing non-GAAP EPS.
$90 to $115
More likely if growth stays strong but normalizes, non-GAAP EPS compounds in the low-to-mid teens area after share count math, free cash flow recovers into the low-to-mid teens of revenue, and DOCN settles near a mid-to-high 30s multiple on non-GAAP earnings as the post-rally re-rating fades.
$35 to $50
More likely if AI and GPU demand disappoints, capacity utilization lags, RPO does not convert into revenue as modeled, free cash flow stays depressed, larger customers churn, competition forces price pressure, or the stock re-rates sharply toward the mid-to-high teens on earnings after growth expectations reset.
DOCN AI technical analysis
DOCN AI technical analysis is long-term constructive but short-term corrective as of the August 3, 2026 data cutoff. Yahoo Finance showed a $133.89 intraday price on August 3 after a $119.09 close, with a 52-week range of $25.56 to $187.50 and an average volume near 3.6 million shares. StockAnalysis listed the 50-day simple moving average near $147.62, the 200-day near $87.48, and RSI near 42.43, with the stock having pulled back hard from its 2026 high before bouncing into the earnings report.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $133.89 | Intraday quote on August 3, 2026, up about 12% from the $119.09 prior close ahead of the August 4 earnings report. |
| Immediate support | $117 to $120 | This zone covers the late-July pullback lows and the $117.54 direct offering price used in the July 24 convertible repurchase. |
| First trend support | $100 to $105 | A psychological round-number band below the July correction that would become the next area to watch if the bounce fails. |
| Deeper support | $87 to $90 | StockAnalysis listed the 200-day simple moving average near $87.48, a major trend-reset zone for the longer-term thesis. |
| Near resistance | $145 to $150 | StockAnalysis listed the 50-day moving average near $147.62, so reclaiming this band would rebuild short-term trend strength. |
| Major resistance | $175 to $188 | The upper end of the 52-week range near $187.50 is the main supply zone after the 2026 spike. |
| Moving averages | 50-day about $148, 200-day about $87 | Price is above the 200-day average but below the 50-day average, which supports a corrective short-term read inside a larger uptrend. |
| Momentum | RSI about 42 | StockAnalysis listed RSI near 42.43, signaling cooling momentum after the pullback but not a completed long-term breakdown. |
| Volume | Average volume near 3.5 to 3.6 million shares | Yahoo Finance and StockAnalysis both list average volume near 3.5 to 3.6 million, so reclaim attempts of the 50-day average should be judged against that baseline. |
| Volatility | 52-week range $25.56 to $187.50, beta near 1.57 | The extreme 52-week range and high beta show how quickly DOCN can reprice when AI cloud expectations or earnings data change. |
| Invalidation | Close below $100, then below $87 | A close below $100 would weaken the intermediate setup, while a break of the 200-day area near $87 would challenge the larger trend-following thesis. |
DOCN AI trading strategy
The DOCN AI trading strategy below is a rules-based research framework, not personal advice. It links technical levels with RPO growth, AI customer ARR, capacity utilization, free cash flow recovery, and valuation discipline around the August 4, 2026 earnings report.
Watch for DOCN to reclaim and hold the $145 to $150 moving-average band on above-average volume while the August 4 earnings report confirms revenue growth near or above the 29% pre-announced level, RPO expansion, aEBITDA margin at the high end of guidance, and a path back to low-to-mid teens free cash flow margins after capacity start-up costs.
A failed reclaim followed by a close back below $117 to $120 should reduce setup confidence, especially if management commentary points to slower GPU demand, delayed capacity fill, weaker RPO conversion, or disappointing free cash flow.
If DOCN pulls back toward the $100 to $105 zone or the deeper $87 to $90 major-support band without a negative revenue or RPO reset, compare the new price with non-GAAP EPS guidance, RPO conversion, free cash flow trajectory, and peer cloud infrastructure multiples.
Do not treat a pullback as attractive if RPO growth stalls, AI customer ARR decelerates, free cash flow stays suppressed beyond one-time start-up costs, or the forward multiple remains at extreme levels versus growth delivery.
Track the August 4, 2026 Q2 results and updated full-year 2026 and 2027 guidance, RPO and weighted-average contract life, ARR and AI customer ARR, million-dollar customer ARR, aEBITDA margin, adjusted free cash flow margin, cash versus remaining convertible notes, GPU and data-center capacity utilization, and fully diluted share count.
Position sizing should reflect that DOCN is a reaccelerating AI-native cloud platform priced for continued excellence, not a guaranteed AI infrastructure winner, and that earnings dates can produce outsized moves.
Investment research summary
Customers pay DigitalOcean to build, deploy, and scale AI inference, agentic, and core cloud workloads without hyperscaler complexity. The core value is an integrated five-layer AI-native platform with predictable pricing and faster time to production for developers and digital-native companies.
DigitalOcean benefits from product simplicity, developer brand, managed platform services, inference tooling, and workflow switching costs. The moat can narrow if AWS, Azure, Google Cloud, or specialist AI clouds undercut on price, GPUs, or developer experience.
The thesis fails if AI demand is cyclical, capacity build outruns utilization, RPO does not convert into revenue as modeled, free cash flow stays weak, remaining convertible notes create overhang, competition caps pricing, or valuation compresses faster than earnings and cash flow grow.
Paddy Srinivasan became CEO in February 2024 and has pushed the AI-native cloud pivot, larger customers, and balance-sheet discipline. The July 2026 convertible repurchase reduced leverage with no net dilution, and the Q2 pre-announcement signaled confident execution into an accelerating demand environment.
AI inference, agentic application deployment, and cloud migration are multi-year trends. DigitalOcean is a focused alternative to hyperscalers, but the same AI infrastructure boom attracts better-capitalized competitors and raises capital intensity.
The stock price implies that DigitalOcean can keep compounding revenue, RPO, AI ARR, and earnings after a large rally and a sharp 2026 pullback. Scenario math leaves limited base-case upside at the current price, so margin of safety depends on either a deeper pullback or faster-than-modeled capacity utilization and cash flow recovery.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| Current price | $133.89 intraday on August 3, 2026; prior close $119.09 | Yahoo Finance DOCN quote | August 3, 2026 |
| Market cap | $15.65 billion intraday at about 116.9 million shares | Yahoo Finance DOCN quote and key statistics | August 3, 2026 |
| Shares outstanding cross-check | About 116.91 million shares on StockAnalysis; company reported 104,322,694 issued and outstanding as of March 31, 2026, then issued about 12.5 million shares in the July 24, 2026 registered direct offering | StockAnalysis DOCN statistics and DigitalOcean Q1 2026 results | August 2, 2026 |
| Q1 2026 revenue and ARR | $258 million revenue, up 22% year over year; ARR $1.032 billion | DigitalOcean Q1 2026 earnings release | August 3, 2026 |
| AI customer ARR | $170 million, up 221% year over year as of March 31, 2026 | DigitalOcean Q1 2026 earnings release | August 3, 2026 |
| Q2 2026 pre-announcement | Q2 revenue growth expected at about 29%; RPO expected to exceed $800 million, up more than 10x year over year; weighted average contract life above 3 years; total committed data center capacity about 155 MW | DigitalOcean Q2 2026 pre-announcement release | August 3, 2026 |
| Convertible note repurchase | Repurchased about $472 million of 0.00% convertible senior notes due 2030 on July 24, 2026, funded by a registered direct offering of about 12.5 million shares at $117.54 per share, with no net dilution and about $153 million of the notes still outstanding | DigitalOcean convertible note repurchase release | August 3, 2026 |
| Cash and cash equivalents | $741 million as of March 31, 2026 | DigitalOcean Q1 2026 earnings release | August 3, 2026 |
| FY2025 revenue and net income | $901 million revenue and $259 million net income | DigitalOcean FY2025 earnings release and Macrotrends | August 3, 2026 |
| TTM revenue, net income, and EPS | About $948.63 million revenue, $236.83 million net income, and $2.27 trailing diluted EPS | Yahoo Finance and StockAnalysis DOCN statistics | August 2, 2026 |
| Free cash flow (TTM) | About $173.51 million free cash flow and $157.55 million levered free cash flow | StockAnalysis and Yahoo Finance DOCN key statistics | August 2, 2026 |
| FY2026 company outlook | Revenue $1.130 billion to $1.145 billion, up 25% to 27%; non-GAAP diluted EPS $1.10 to $1.20; adjusted free cash flow margin 9% to 12% | DigitalOcean Q1 2026 earnings release | August 3, 2026 |
| Valuation ratios | Trailing PE about 59x at the August 3 intraday price; forward PE above 100x; price to sales about 16.5x; EV to EBITDA about 47x per StockAnalysis | Yahoo Finance and StockAnalysis DOCN statistics | August 2, 2026 |
| Moving averages, RSI, and 52-week range | 50-day moving average near $147.62, 200-day near $87.48, RSI near 42.43; 52-week range $25.56 to $187.50 | StockAnalysis and Yahoo Finance DOCN technical data | August 2, 2026 |
| Analyst consensus | Buy consensus from 16 analysts with an average target near $176.86, while several firms lowered targets in July 2026 to a range of about $144 to $165 | StockAnalysis DOCN forecast and analyst news | August 2, 2026 |
This DigitalOcean stock analysis page is an informational research tool only. It is not investment advice, a recommendation, or a guarantee of future returns. Forecast ranges are scenarios based on available public data as of August 3, 2026 and may be wrong if DigitalOcean fundamentals, RPO conversion, capacity utilization, free cash flow, market multiples, interest rates, the August 4, 2026 earnings report, or investor sentiment change.
Design trading strategies visually with 10+ indicators. Set entry/exit conditions and risk management, then generate Pine Script code with no coding required.
Filter and discover stocks based on market cap, dividend yield, P/E ratio, sector, and more. Screen thousands of stocks with real-time data.
Smart AI-driven stock selection with fundamental screening, analyst estimates, and key metrics. Filter by P/E, market cap, dividends, and more.
