QM · rank #3 · 2026-10-21

DOCN

NYSE · $11.60B (USD)

SignalStrong Buy7.5strength 7.5 / 10

verdict · PROCEED

The exact numbers the algorithm saw.

Factor scores and the inputs behind this pick.
Momentum 12-1 Return from 12 months ago to 1 month ago.	+299.67%
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.	$11.60B
Anchor (recent) Close on 2026-09-21	$146.16
Anchor (far) Close on 2025-09-19	$36.57

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 provides a developer-centric cloud and AI platform spanning GPU/CPU infrastructure, managed agents, and inference services for over 680,000 customers.

Rationale

High ROE (62%) and net margins (23%) paired with 29% revenue growth, a 12x YoY surge in RPO to $894M, and raised FY26 guidance validate the quality-momentum signal.

Material risks

1Hyperscalers or major customers internalizing inference, agent orchestration, and storage workflows, commoditizing DigitalOcean's software-layer differentiation.
2Over $1.4B in combined debt and equipment obligations funding capacity additions that could impair free cash flow if AI utilization rates weaken.

AI verdict council

Each pick is reviewed independently by 3 models before any order. 2 of 3 voted to proceed.

OpenAI

Proceed

Claude

Caution

Gemini

Proceed