Short Sellers May Be Regretting Shorting DigitalOcean Holdings (DOCN) Stock After Latest Analyst Rating

DigitalOcean Holdings, Inc. (NYSE:DOCN) is one of the 7 Worst Cloud Stocks To Buy According to Short Sellers. On June 3, KeyBanc initiated coverage on DigitalOcean Holdings, Inc. (NYSE:DOCN) with an Overweight rating and assigned a price target of $200 to the stock. The price target reflects 15.6% upside from current levels. As AI demand increases, DigitalOcean is investing heavily to build and expand its cloud infrastructure, the analyst told investors in a research note. As a result, the company is expected to generate higher cloud revenues in the coming year.

DigitalOcean Holdings, Inc. (NYSE:DOCN) is one of the 7 Worst Cloud Stocks To Buy According to Short Sellers.

Analyst Jackson Ader had this to say about the company’s journey and future prospects:

“The moment came for DigitalOcean in 2024, when the world began realizing that hyperscalers were unable to keep up with AI workload demand. Customers, both traditional and AI start-ups, turned to DigitalOcean for their AI inference needs and were met with easy deployments, access to storage, memory and CPU compute that was already DigitalOcean’s specialty and, importantly for the stock, an increasing amount of GPU and CPU capacity. We believe DigitalOcean’s playbook has more room to expand.”

Earlier, on May 12, UBS also expressed confidence in the company’s long-term growth outlook. The firm raised its price target on DigitalOcean Holdings, Inc. (NYSE:DOCN) from $160 to $170 and reaffirmed a Neutral rating. Discussions with management increased confidence in the company’s competitive positioning, business strength, and growing demand driven by AI.

DigitalOcean Holdings, Inc. (NYSE:DOCN) operates an agentic inference cloud platform that enables developers and growing businesses to run, scale, and build applications worldwide. The company’s offerings include infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS) solutions. It also delivers machine learning (ML) and artificial intelligence (AI) solutions.

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 the cheapest AI stock.

READ NEXT:  10 Best High-Bandwidth Memory (HBM4) Value Chain Stocks to Buy According to Hedge Funds and  10 Best High-Bandwidth Memory (HBM4) Value Chain Stocks to Buy According to Hedge Funds.

Disclosure: None. Follow Insider Monkey on Google News.

1281292 - 11759070 - 1