DigitalOcean (NYSE:DOCN) Issues FY 2026 Earnings Guidance

DigitalOcean (NYSE:DOCN) issued an update on its FY 2026 earnings guidance on Tuesday morning. The company provided earnings per share (EPS) guidance of 0.750-1.000 for the period, compared to the consensus estimate of 1.680. The company issued revenue guidance of $1.1 billion-$1.1 billion, compared to the consensus revenue estimate of $1.1 billion. DigitalOcean also updated its Q1 2026 guidance to 0.220-0.270 EPS.

DigitalOcean Trading Down 5.0%

DOCN stock traded down $3.11 during trading on Wednesday, reaching $59.63. 828,551 shares of the stock were exchanged, compared to its average volume of 3,141,051. The firm has a market capitalization of $5.46 billion, a price-to-earnings ratio of 23.98, a P/E/G ratio of 8.32 and a beta of 1.76. The business has a 50 day moving average price of $55.78 and a 200-day moving average price of $45.13. DigitalOcean has a 1 year low of $25.45 and a 1 year high of $70.43.

Analysts Set New Price Targets

A number of research analysts recently commented on DOCN shares. Canaccord Genuity Group upped their price objective on DigitalOcean from $65.00 to $80.00 and gave the company a “buy” rating in a report on Friday. Weiss Ratings reaffirmed a “hold (c+)” rating on shares of DigitalOcean in a research note on Monday, December 29th. Cantor Fitzgerald increased their price target on DigitalOcean from $68.00 to $83.00 and gave the stock an “overweight” rating in a report on Wednesday. Citizens Jmp lifted their price target on shares of DigitalOcean from $60.00 to $83.00 and gave the company a “market outperform” rating in a research report on Wednesday. Finally, Bank of America upped their price objective on shares of DigitalOcean from $72.00 to $86.00 and gave the stock a “buy” rating in a report on Wednesday. Nine investment analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $61.21.

Key DigitalOcean News

Here are the key news stories impacting DigitalOcean this week:

• Positive Sentiment: Q4 results beat consensus: EPS of $0.44 vs. $0.38 expected and revenue of ~$242M, signaling better-than-expected near-term performance. DigitalOcean (NYSE:DOCN) Beats Q4 CY2025 Sales Expectations
• Positive Sentiment: AI momentum: management reported a large AI ARR ramp (reported ~150% ARR growth for AI-related revenue), suggesting durable, higher‑value customer adoption in inference workloads. AI Momentum Propels DigitalOcean Past Estimates With 150% ARR Surge
• Positive Sentiment: Up‑market traction and retention: large‑customer spending rose substantially (>$1M customers +123%), 0% churn among top customers this quarter and NDR ~101%, indicating stickier, higher‑quality revenue. DigitalOcean (DOCN) Q4 2025 Earnings Transcript
• Positive Sentiment: Strategic GPU diversification: expanded AMD Instinct GPU deployment to improve price/performance and supply resiliency for inference workloads. This supports competitive positioning vs. hyperscalers. DigitalOcean Expands AMD AI Cloud As Investors Weigh Growth And Margins
• Positive Sentiment: Analyst upgrade: Bank of America raised its price target (to $86) and maintains a buy rating, providing incremental buy-side validation. Benzinga – Bank of America price target raise
• Neutral Sentiment: Profitability: DigitalOcean reported strong GAAP net income and healthy margins for FY2025, underscoring that growth is not coming at the expense of profitability. DigitalOcean Announces Fourth Quarter and Fiscal Year 2025 Financial Results
• Neutral Sentiment: Market dynamics: relatively elevated short interest (~10%+) and the stock’s mid‑cap profile can amplify moves as news validates the AI growth story (potential technical support for further rallies).
• Negative Sentiment: Guidance cut on EPS: management issued Q1 and FY2026 EPS ranges below Street consensus (Q1 EPS guide 0.22–0.27 vs. ~0.39 consensus; FY guide 0.75–1.00 vs. ~1.68), which may temper expectations on near‑term profitability. DigitalOcean Announces Fourth Quarter and Fiscal Year 2025 Financial Results
• Negative Sentiment: Near‑term free‑cash‑flow pressure: management expects lower FCF margins in 2026 (investing in data centers/capex to meet demand), which could worry income‑sensitive investors despite being growth‑oriented spending.

Institutional Investors Weigh In On DigitalOcean

Hedge funds have recently added to or reduced their stakes in the business. Allworth Financial LP grew its stake in shares of DigitalOcean by 54.4% in the third quarter. Allworth Financial LP now owns 724 shares of the company’s stock worth $25,000 after acquiring an additional 255 shares in the last quarter. Wilmington Savings Fund Society FSB purchased a new position in DigitalOcean in the third quarter valued at $37,000. Transamerica Financial Advisors LLC grew its stake in DigitalOcean by 417.9% during the 4th quarter. Transamerica Financial Advisors LLC now owns 782 shares of the company’s stock worth $38,000 after purchasing an additional 631 shares in the last quarter. UMB Bank n.a. increased its holdings in DigitalOcean by 242.1% during the 4th quarter. UMB Bank n.a. now owns 821 shares of the company’s stock worth $40,000 after purchasing an additional 581 shares during the period. Finally, Advisory Services Network LLC purchased a new stake in DigitalOcean during the 3rd quarter worth about $54,000. 49.77% of the stock is currently owned by institutional investors and hedge funds.

DigitalOcean Company Profile

DigitalOcean Holdings, Inc is a cloud infrastructure provider that focuses on simplicity, performance and developer experience. The company offers a range of cloud services designed to help software developers, startups and small- to medium-sized businesses deploy, manage and scale applications. Its flagship offering, Droplets, provides virtual private servers that can be configured with various CPU, memory and storage options. In addition to compute instances, DigitalOcean’s platform includes managed Kubernetes, scalable object and block storage, managed databases, load balancers and networking capabilities such as Virtual Private Cloud (VPC) and Floating IPs.

Founded in 2011 and headquartered in New York City, DigitalOcean was created with the goal of making cloud computing more accessible to individual developers and smaller teams.