DigitalOcean’s Stock Gains as Price Target Raised

Morgan Stanley has raised its price target for DigitalOcean Holdings, Inc. (NYSE: DOCN) to $52 from $41, while maintaining an Overweight rating on the cloud computing company's shares. The adjustment follows DigitalOcean's strong fourth-quarter results and a slight acceleration in annual recurring revenue growth. Morgan Stanley anticipates that the predicted low-to-mid teens top line growth for 2025 may appear conservative, given the company's current trajectory.

With Investor Day approaching in early April, expectations are set for this event to act as an incremental catalyst for DigitalOcean's stock performance.

DigitalOcean's share price has seen an impressive uptick of nearly 9.58% through yesterday's trading session, even against the backdrop of falling markets. This morning's pre-market session has the stock up a further 3.43% at $42.23.

As of the latest data, DigitalOcean commands a market capitalization of approximately $3.77 billion. The stock has experienced fluctuations between a 52-week low of $26.63 and a 52-week high of $47.02, with the high coming within the past couple of weeks.

Based in New York, DigitalOcean operates within the Technology sector, specifically focusing on Software – Infrastructure. The company offers a cloud computing platform to developers, startups, and small and growing digital businesses internationally. DigitalOcean's platform covers a range of services from on-demand infrastructure and platform tools to managed databases, container registry, and marketplace solutions for developers. The company caters to a broad customer base, including software engineers, data scientists, and hobbyists, for various applications across industry verticals. Striving in a competitive industry, DigitalOcean continues to innovate and expand its offerings, including specialized AI/ML applications and managed hosting solutions.

Currently, 13 analysts offer opinions on the stock, with an average price target of $42.23 and a consensus rating of ‘buy'. This positive analyst sentiment underscores the confidence in DigitalOcean's market position and its capacity to maintain momentum moving forward.

As DigitalOcean approaches its Investor Day event, all eyes are on how the company will capitalize on its current standing and whether it can surpass increasingly bullish estimates for the future. With Morgan Stanley seeing an “attractive setup in the quarters ahead” for DigitalOcean, the stage is set for further potential upside in the company's stock, as analysts and investors anticipate the next steps in its growth journey.