QM · rank #11 · 2026-09-07
DOCN
NYSE · $13.01B (USD)
The exact numbers the algorithm saw.
| Momentum 12-1 Return from 12 months ago to 1 month ago. | +275.64% |
|---|---|
| ROE TTM Return on equity, trailing 12 months. | +62.3% |
| Profit margin Net profit margin, trailing 12 months. | +23.3% |
| Market cap (USD) Size filter: > $500M required. | $13.01B |
| Anchor (recent) Close on 2026-08-07 | $124.15 |
| Anchor (far) Close on 2025-08-08 | $33.05 |
The AI research card
Independent qualitative review of each pick before the order is placed. On the rare day the research service is unavailable, the paper book trades on the quant ranking alone and no card appears here.
Summary
DigitalOcean is a cloud infrastructure platform targeting SMBs and developers with simplified pricing, now scaling rapidly into AI workloads with $234M in AI customer ARR growing 212% YoY.
Rationale
The quality_momentum signal is reinforced by a 29% revenue growth rate, 62% ROE, 23% profit margins, and a twelvefold expansion in remaining performance obligations that gives the momentum genuine earnings-quality backing rather than pure sentiment.
Material risks
- 1Hyperscaler commoditization is the core structural threat — DOCN lacks patent or sole-source moats, and AWS/GCP/Azure can undercut on price or bundle equivalent SMB-tier AI infrastructure, capping long-term margin expansion.
- 2The $500M convertible note repurchase funded by a concurrent equity offering dilutes existing shareholders and signals balance sheet constraints that could limit reinvestment capacity if AI infrastructure capex requirements accelerate.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.