Key Points
He feels that his fellow pundits are underestimating the company's growth potential.
In his view, DigitalOcean can particularly benefit from a wave of AI inferencing.
- 10 stocks we like better than DigitalOcean ›
Cloud computing specialist DigitalOcean (NYSE: DOCN) was, hardly for the first time in recent months, quite the outperformer on the stock market on Wednesday. Giving the stock propulsion was a price target increase from an analyst, which helped DigitalOcean shares gain more than 6% in share price that day.
Advancing with AI
The man behind the move was Param Singh of Oppenheimer. Before market open, he lifted his fair value assessment on DigitalOcean to $100 per share from his preceding $85. He also maintained his outperform (i.e., buy) recommendation on the specialty tech stock.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Singh's adjustment was derived from a fresh discounted cash flow analysis conducted by the analyst, according to reports. This was inspired by what he considers to be the expanding addressable market for artificial intelligence (AI) inferencing, i.e., the point at which an AI model shifts from learning to practical use.
The analyst also waxed bullish on the generally positive client response to DigitalOcean's offerings, which he considers are competitive in the market. In his view, the current consensus on the company's growth potential is more modest than it should be.
Not the cheapest stock on the block
DigitalOcean is expensive both on pure share price and on valuations. That said, it seems to have found its niche as a cloud computing specialist for AI developers, and its growth continues to be impressive. I'd file this stock under the "pricey but worth it" category.
Should you buy stock in DigitalOcean right now?
Before you buy stock in DigitalOcean, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and DigitalOcean wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $508,877!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,115,328!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 189% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 18, 2026.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DigitalOcean. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
