QM · rank #12 · 2026-09-08
DOCN
NYSE · $13.22B (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. | $13.22B |
| 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 pivoting aggressively toward AI workloads and higher-spend enterprise-adjacent customers.
Rationale
The momentum_12_1 of 2.76 is reinforced by a concrete fundamental catalyst — 29% revenue growth, 212% AI ARR growth, and a twelvefold RPO expansion — while ROE of 62% and 23% profit margins confirm the quality screen is capturing real earnings power, not accounting noise.
Material risks
- 1Hyperscaler commoditization is the core structural threat — AWS, GCP, and Azure are actively courting SMBs and AI developers with comparable or superior price/performance, which could erode DOCN's differentiation and cap net revenue retention before the AI backlog converts to durable revenue.
- 2The $500M convertible note repurchase funded by equity dilution signals balance sheet management pressure; if AI ARR growth decelerates before the RPO backlog fully converts, the equity offering overhang could break momentum sharply.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.