QM · rank #9 · 2026-09-10
DOCN
NYSE · $13.22B (USD)
The exact numbers the algorithm saw.
| Momentum 12-1 Return from 12 months ago to 1 month ago. | +308.86% |
|---|---|
| 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 2026-08-11 | $120.86 |
| Anchor (far) Close on 2025-08-11 | $29.56 |
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 margins, and a twelvefold expansion in remaining performance obligations that provides genuine revenue visibility rather than pure sentiment-driven momentum.
Material risks
- 1Hyperscale commoditization is the core structural threat — AWS, Google, and Azure can undercut DOCN on price and out-feature it on AI tooling, potentially eroding the SMB/developer niche that underpins the entire quality thesis.
- 2The $500M convertible note repurchase funded by a concurrent equity offering dilutes existing shareholders and signals management is managing the capital structure defensively, which could weigh on the momentum signal if the equity raise pressures the stock.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 3 of 3 voted to proceed.