We came across a bullish thesis on DigitalOcean Holdings, Inc. on X.com by @MoneyShow. In this article, we will summarize the bulls’ thesis on DOCN. DigitalOcean Holdings, Inc.’s share was trading at $59.27 as of February 25th. DOCN’s trailing and forward P/E were 29.55 and 16.69 respectively according to Yahoo Finance.
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DigitalOcean Holdings, Inc., through its subsidiaries, operates an agentic inference cloud platform in North America, Europe, Asia, and internationally. DOCN enters 2026 with a compelling setup as artificial intelligence adoption transitions from experimentation to real-world deployment across startups and small-to-medium businesses, positioning the company as a differentiated, developer-first alternative to hyperscale cloud providers.
Unlike large platforms such as Amazon Web Services, Microsoft Azure, and Oracle, DigitalOcean operates in a distinct segment focused on simplicity, cost efficiency, and developer accessibility, which increasingly resonates with emerging AI-native companies that lack the scale or resources to navigate complex enterprise cloud environments.
A key underappreciated catalyst is Nvidia Corporation stepping back from operating its own cloud business, a move that reinforces the role of independent cloud providers while allowing DigitalOcean to strengthen partnerships and expand its AI infrastructure offerings. The company has begun deploying Nvidia H100 GPUs and building an integrated AI stack tailored for SMB customers, and its AI-related services have already delivered triple-digit growth for multiple consecutive quarters, signaling early product-market fit and meaningful revenue acceleration potential.
Sentiment dynamics further enhance the opportunity, with short interest at 14.5% of float—the highest level since 2023—creating the conditions for a potential short-covering rally if execution continues to improve and growth reaccelerates. At the same time, options pricing remains relatively inexpensive, with a Schaeffer’s Volatility Index of 63% ranking in the lower percentile historically, suggesting the market is not fully pricing in the possibility of a stronger growth phase. Together, improving fundamentals, favorable industry shifts, and positioning dynamics create a setup where a breakout in performance could drive a meaningful rerating of the stock.
Previously, we covered a bullish thesis on DigitalOcean Holdings, Inc. (DOCN) by Rene Sellmann in May 2025, highlighting its developer-first cloud strategy, upmarket expansion, and stable, cash-generative operations. DOCN’s stock price has appreciated by approximately 105% since our coverage. @MoneyShow shares a similar view but emphasizes 2026 AI adoption, Nvidia partnership, and potential short-covering dynamics, providing a fresh perspective on growth catalysts.
DigitalOcean Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held DOCN at the end of the third quarter which was 25 in the previous quarter. While we acknowledge the risk and potential of DOCN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DOCN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
