DigitalOcean is a cloud infrastructure provider that focuses on simplifying cloud computing for developers and businesses. By offering a range of services such as cloud hosting, virtual servers, and managed databases, DigitalOcean enables users to build, deploy, and scale applications seamlessly. The company is particularly known for its user-friendly platform, which provides intuitive tools and resources that cater to developers of all skill levels, helping them to create scalable solutions quickly and efficiently. With a strong emphasis on community support and educational resources, DigitalOcean fosters a collaborative environment for developers to enhance their skills and optimize their cloud infrastructure.
DigitalOcean currently trades at $38.70 per share and has shown little upside over the past six months, posting a middling return of 3.7%. The stock also fell short of the S&P 500’s 13.4% gain during that period.
Shares of cloud computing provider DigitalOcean (NYSE: DOCN)
fell 16.1% in the morning session after the company reported third-quarter earnings results and provided underwhelming guidance with sales outlook for the next quarter roughly in line with analysts' estimates, while its EPS forecast missed. Also, sales came in roughly in line during the quarter, unexciting, and not enough for the market. Given the company's recent AI bets and potential in the SMB space, expectations were likely high, heading into earnings. However, the company provided some encouraging updates, announcing the early availability of its first GenAI Platform. Overall, this quarter was mixed, with the guidance weighing on shares.
Cloud computing provider DigitalOcean (NYSE: DOCN) met Wall Street’s revenue expectations in Q3 CY2024, with sales up 12.1% year on year to $198.5 million. The company expects next quarter’s revenue to be around $200 million, close to analysts’ estimates. Its non-GAAP profit of $0.52 per share was 28.7% above analysts’ consensus estimates.
Many investors are focused on artificial intelligence (AI) powerhouses like Nvidia, Microsoft, and Amazon, but AI opportunities also exist at the smaller end of the stock market.
The Fed cut rates by 0.5%, making it easier for small- to medium-sized cloud computing companies to refinance debt. Analyst suggests 5 firms may benefit.
