DigitalOcean Holdings, Inc. DOCN shares soared 9.9% in the last trading session to close at $58.94. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.3% gain over the past four weeks.
DigitalOcean benefits from strong AI infrastructure solutions, which provide both hardware and software infrastructure to AI-driven companies that are processing live data globally on DOCN.
This company is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of -22.5%. Revenues are expected to be $237.66 million, up 16% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For DigitalOcean, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DOCN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
DigitalOcean is part of the Zacks Internet - Software industry. Arista Networks ANET, another stock in the same industry, closed the last trading session 5.4% higher at $143.72. ANET has returned 3.4% in the past month.
Arista Networks' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.75. Compared to the company's year-ago EPS, this represents a change of +15.4%. Arista Networks currently boasts a Zacks Rank of #2 (Buy).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
