QM · rank #14 · 2026-09-09
DOCN
NYSE · $13.22B (USD)
The exact numbers the algorithm saw.
| Momentum 12-1 Return from 12 months ago to 1 month ago. | +292.53% |
|---|---|
| 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 2026-08-10 | $129.73 |
| 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 with AI customer ARR of $234M growing 212% YoY.
Rationale
The quality_momentum signal is reinforced by a 29% revenue growth rate, 62% ROE, 23% profit margin, and a twelvefold expansion in remaining performance obligations that provides concrete backlog-driven momentum rather than pure sentiment rotation.
Material risks
- 1Hyperscale providers (AWS, GCP, Azure) offering competitive AI infrastructure at scale could commoditize DOCN's core IaaS layer and cap pricing power, particularly as AI workloads mature and customers graduate to enterprise-grade stacks.
- 2The $500M convertible note repurchase funded by equity issuance dilutes existing shareholders and signals management is managing capital structure complexity rather than deploying cash into organic growth, which could weigh on per-share momentum.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.